F OR P UB LIC AT ION


### U N I TED STA TES C O U R T O F A PPEA LS F O R T H E N IN T H C IR C U IT

U NI TED S T A T ES O F A M ERI CA ,

Plaintif f-Appellee ,

v.
C HAO F AN XU , Defendant- Appellant

. No. 09-10189

D.C. No. 2:02-CR-00674- PMP -L RL -1

U NI TED S T A T ES O F A M ERI CA ,

Plaintif f-Appellee ,

v.
Y I NG Y I YU , Defendant- Appellant

. No. 09-10193

D.C. No. 2:02-CR-00674- PMP -L RL -4

U NI TED S T A T ES O F A M ERI CA ,

Plaintif f-Appellee ,

v.
G UO J UN XU , Defendant- Appellant

. No. 09-10201

D.C. No. 2:02-CR-00674- PMP -L RL -2U NI TED S T A T ES V

. X U 2

U NI TED S T A T ES O F A M ERI CA ,

Plaintif f-Appellee ,

v.
W AN F ANG K

UANG , Defendant-

Appellant

. No. 09-10202

D.C. No. 2:02-CR-00674- PMP -L RL -3

OPI NI ON

Appea l from the United States District Court for the D istrict of Neva da Phili p M. Pro, District J udg e, Presiding Argued and Submitted Ap ri l 17 , 2 01 2— San F ra

nc isc o, Ca lif

or nia Filed January

3, 2013

B e fo re : A lf

re d T . G oo dw in, Ste ph e n Re inh ard t, and Mary H. Murguia , Ci rc uit

Judg e s. Op ini on by Judg e Go od

wi nU NI TED S T A T ES V

. X U 3

T hi s s ummary cons t i t ut es n o part of t he op i ni on of

t he cour t

. I t ha s * b een p repa red b y co urt s t af f f o r t he co nveni ence o f

t he read er. SUMMAR

Y *

Crim inal L aw The pa n e l a f f ir me d th e c o n v ic ti o n s an d

v a c a te d the sentenc es of f

our Chinese nationa ls who participate d in a scheme to ste al funds from the B ank of China a nd to esca

pe prosec ution and retai n the proc eeds by illega l transfe rs of funds and by

immigration fraud.
The panel held that the defe ndants’ RI CO co nspiracy convictions are not the result of a n improper e x trater

ritorial
a pp lic a tio n o f 1 8 U .S. C. § 19 62 (d ) b e c a us e the de fendan ts’ criminal ente r

prise involved both bank f raud a nd immigration fra ud cente red on stea ling money from the Bank of China and trave ling f

ree ly with the stolen money

in the United States.

Ex plaining that conspirac y does not requir e completion of the substantive crime, the panel held t hat there was suff icient evidenc e to support the def endants’ money

launder ing conspirac y

convictions under 18 U .S.C. § 19 5 6 (h), and that 18 U.S.C. § 19 57(d)’ s jurisdictional require ment is met beca use the transactions t ook place in the Unit ed S tates. The p an e l l i k e w i s e h e l d th a t th e r e w a s s u f f i c i e n t e v i d e nc e to su pp or t th e de fe ndants’ c onvic tio ns fo r c on sp ir a c y to transport stolen money

under 18 U .S.C. § 2314.
Th e pa ne l he ld t hat th e dis tr ic t c ourt

did no t pla inl y e rr

in its treatment of videota p ed testimony at trial, that the defe ndants’ Confrontation Cl ause ri ghts were not violated,U NI TED S T A T ES V

. X U 4

and that th e dis tr ic t c ourt

did no t abu se its dis c re tio n in lim iti ngthe te sti mony

of the de fe nd ants ’ e xpe rt

wi tne sse s.
Th e p anel r ejec ted as mer itless the defe ndants’ jury instruction challeng es re lated to burde n shifting, Chinese la w, fata l varianc e/construc tive amendment, theor y of def ense, aiding and abe tt i n g , the def inition of “on or about,” a nd the incomprehe nsi b ility

of the numer ous Chinese names p r e s e n t e d t o th e j ur y. The pa nel held that the district cour t did not viol ate the Ex Post Facto Clause by

applying the 2 0 07 Sentencing Gui delines to a c onspiracy that did not end until the de fe nd ants ’ 2 00 4 a

rr e st.
The panel rema

nded for rese ntencing under U.S.S .G. § 2S1.1(a)( 2) because the district court improper ly relied on the def endants’ f oreig n conduct to mee t the re q u irements of U.S.S.G. § 2S1.1(a )(1) (A). The pa nel re jected a s meritless an objection to an abuse of trust enha nceme n t under U.S.S.G. § 3B1.3, a nd deeme d waived a

n objection to a

n enhanc ement for r elocation t o avoid law e nforc ement under U.S.S.G. § 2B1.1( b)(9) (A).

Beca u s e the district cour t did not provide sufficient g rounds to support the $482 mill i o n restit ution order, the panel r emande d for r econside rati o n reg ardingits lega l and fa c tua l ba sis

.U NI TED S T A T ES V

. X U 5
CO UN SEL

Mari o D . V a le nc ia , H e nd e rs on , N e va da , f or De fe nd antApp el l ant C hao F an Xu; Mar c Picker , Reno Neva da, for Def endant- Appellant Guo J un Xu; L oren G raha m, Stateline, Neva da, fo r Def

endant- Appellant YingYi Yu; Chad A. Bow ers, L as Ve g as, Ne vada, f or De fenda

nt-Appellant Wan Fa n g Ku an g. Krista Tong ring , United St ates Department of J ustice, Org anized Crime and Ga ng Section, Washington, D.C.; Ronald L . Cheng , United States Depa rtment of J ustice, Org anized Crime and Ga

ng Section, L os Ang eles, California , for Plaintiff-A

ppellee.

OP IN ION
GOODWI

N, Circuit J udg e:
Four Chinese nationals appe al their c onvictions and sentenc es for fede ral crimes that they committed as part of a scheme to steal funds from the Ba nk of China, where two of the def endants we re h i gh-leve l employ ees, a nd to esca

pe prosec ution and reta in the proce eds by illega l transfe rs of fu nd s and by imm ig ratio n fr a

ud

. We a ff

ir m th e c on vic tio ns , an d v ac at e t h e s en t en ce s an d re m an d fo r r es en t en ci n g.
Defendants Xu Chaof

an (“ Chaofan” ), Xu Guojun (“ Guoj un”), Yu Ying Yi (“Y ingy i”), a nd KuangWan FangU NI TED S T A T ES V

. X U 6

C h ine se c u sto m p u ts a p e rs o n ’s su rn a m e fi rs t an d g ive n n a m e las t. W e 1

re fer to D e fen d a n ts b y the ir fi rs t na m e to a v o id c o n fus io n w ith c e rta in
w itne sse s w h o sh a re a su rn a m e w ith a d e fen d a n t. (“ Wanfang ”) ( c o ll e c ti v e ly , “ D e f e n d an ts ” ) , c h a ll e n g e the 1 application of the Racke teer Influenc ed and Corr

upt Org anizations Act (“RI CO”) to extraterr itorial conduct whic h
occur red in China, as well as various ruling s on evidenc e and de fe ns e mot ion s. Th e y

a lso c ha lle ng e the ir

se nte nc e s.
The sche me involved divertingbank funds f rom the B ank of Chi na to a ho ldi ng c omp any in Ho ng Ko ng . De fendan ts wer e cha rg ed with ma

nipulating auditing controls to conce al the ir div e rs ion of ba

nk fu nd s, and us ingthe fu

nd s to sp e c ulate in fo re ig n c ur

re nc y , to make fr a

ud ule nt loa ns , to p ur c ha se rea l e state in A sia and North Americ a, and t o fi n an ce g ambling trips to L as Veg as and other casino venues. A s an essential par t of the sche me, ea ch of the Def endants e ntere d int o a fr a ud ule nt m arriag e wi th a

sp ou se wh o h e ld v a lid United States immigration status. After th e Ba n kof China discovere d their scheme , Def endants fle d to the United States
us ingthe ir

fa lsi fi e d immig ratio n d ocu ment s. De fe nd ants wer e ar rested a nd broug ht to trial in the United States District Court for the District of

Neva da. We have jurisd i cti on under 28 U .S.C. § 1291 and 18 U.S.C. § 3742.

I. F ac ts and P r oc e dur al B ac kgr ound
Gu oju n an d Ying yi w e re le g a lly marr ie d in

Chi na in 1985. Cha o fa n and Wanfa ng wer e leg ally

marrie d in China in 1992. Chaofan was employ ed by the Ba nk of China from 1982 throug h 200 1

. The B ank of China is a state -owne dU NI TED S T A T ES V

. X U 7
bank that is he adquar

tere d in B eijing. I t ope rate s throug hout China throug h a ser ies of provinc i al b ranches, sec ond-leve l branc hes, and sub- branc hes. In 1992, Chaofan w as promoted to p re sid e nt/ g e ne ra l mana g e r o f t he Ka ipi ngsu

b- br anc h in Gu ang do ngpr ov inc e , a

nd he se rv e d in

that po sit ion

until Aug ust 1998. Guojun was hire d i n 1994 as hea d of
acc ounting at the Kaipingsub-bra nch. In August 1998, Chaofan w as promoted, a n d unindicted co- conspirator Yu Z hendong(“Z hendong ”) be came president/g ener al manag er of the Ka iping sub-br anch. When Z hendo ng was promoted in M ay 2 000, Guojun took over at the Kaipingsub-bra nch and ser ved as pr esident/g ener al m an ager until the Bank of China discovere d the fra

ud in October

2001. Duringtheir mana g ement of the Kaiping sub-bra nch, the th re e ma n age rs en gage d i n th re e ty p es o f fr au d : (1 ) fo re i gn exchang e spec ulation, resulting in a los s to the Ba nk of China of a pp ro xima te ly

$1 47 mil lio n; ( 2) “ou t- of -b oo k” loa

ns , which ar e loans that wer e not proper ly rec orded in the ba

nk’s
acc ounting sy stem, resulting in a loss of approximately $181 milli on; and (3) f

alse loans, in which l o an s totaling $90-95 milli on wer e ente red into the ba nk’s ac counts, but the proce eds fr om the loan s we re dive rted into a HongKong
c on du it c omp any

name d E ve r Joi nt.
In1 9 9 5 , th e B an k o f C h i n a c o n d u ct eda f o re i gnex ch an ge audit including the Kaipingsub -b ra nch. To avoid discovery of the fore ign curr ency exchang e losses, Chaofan , Guojun,
and Z he nd on g dir e c te d K a ipi ngsu b- br anch em

plo y e e s to falsify bank re cords. The se ef forts succ eede d. The thre e manag ers we re able t o pass s ubsequent audits by the B ank of C h i n a i nth e s am e w ay.U NI TED S T A T ES V

. X U 8 Duringthe cour se of the f und diversions, Chaofa

n, Guojun, Wanfang , and Ying yi entere d into false mar riag es with spouses who h el d valid United States immigration status . T he purp os e of th e fa lse marr ia g e s w a s to g a in
re s id e n c y s tatu s in th e U n it e d St a te s to av o id Ch in e se L aw e nf or c e me nt. Duringthe time alleg ed in the indi ctment, Chaofa n, Guojun, Wa

nfang , and Ying yi made numer ous g ambling tr ips to M a c a o, Au str a lia , M a lay sia , a nd the Phi lip pines. Th e se trips were financ ed with wire transfe rs t otaling more t han $80 milli on from Eve r Joi nt acc ounts. Using c ounterfe it visas and p as s p o rt s, the g roup also traveled to L as Ve g as in 2000 and 2001, wher e they

stay ed at c asino hotels and spent substantial sums playing ba cca

rat. The g ambling mone y was a rra ng ed thr o u ghi n t erm ed i ar i es wh o u s edca s h i er ’s ch ec k s draw n from Ever Joint accounts t o s et up cre dit lines at the casinos. The L as Ve g as g ambling mone y included wire transfe rs totaling
ov e r $ 2 mi lli on

fr om E ve r Joi nt a c c ount s th a t r e su lte d in
c he c ks be ingiss ue d b y

the c a sin os to the in terme dia ri e s to fa c ili tate the re tur

n o f t he fu nd s to D e fe nd ants fo r t he ir persona l use.
On Octobe r 12 , 2 0 0 1 , due to a c hang e in ac counting proce dures, the Ban k o f China discover ed a $482 million discrepa ncy in bank re cords that wa s attributed to the Kaiping sub-bra nch. Chaofa

n and Guojun fled to Hong Kong . Using their fr audulent passports and visas, they flew to Va

ncouver , Br itish Columbia, a

nd continued on to L as Veg as. C h aofa n and Guojun then discove red that Chinese aut h o ri ties had frozen the $8 million that they had tra nsfer red to Cae sars P a l a c e c a s i n o f

o r th e i r p e r s o n a l u s e

. W an f an g an d Y i n g yi fled sepa rate ly to Vancouv er and then to the United StatesU NI TED S T A T ES V

. X U 9 usingth e ir

f r a u d u le n tl y o b ta in e d immi g r a ti o ns tatu s

. T he United States does not have an ex tradition treaty with China.

Z hendongwas arr ested in L os Ang eles on De cembe r 19, 2002. Z hendong pleade d g uilty to f eder al cha rg es and a g ree d to return t o C h i n a. He cooper ated with the F BI in the investigation and prosec ution of Defe ndants. Id. Guojun and Ying yi were arr ested in Wic hita, Kansa s, on September 22, 2004. Chaofan a

nd Wanfangwer e ar

rested in Edm ond, Oklahoma, on Oc tober 6, 2004.

In the sec ond superse ding indictment, De fenda nts were c ha rg ed with

RI CO c on sp ir a c y

in v iol a tio n o f 1 8 U .S. C. § 1 96 2( d) ( count o ne ), mon e y la un de ri ngc on sp ir a c y

in vio latio n o f 1 8 U .S. C. § 19 56 (h ) ( c ount t wo ), c on sp ir acy

to transport stolen money in violation of 18 U.S.C. § 371 (count three ), use of

a fr audulently

obtained visa in vi o l at i on of 18 U. S.C. §§ 15 46 (a ) & 2 ( c ounts fo ur thr ou g h n ine ), and

us e of a f raudule nt passport in violation of 18 U.S.C. §§ 1542 & 2 (counts ten through fiftee n).

Fr om Febr

uary 2005 throug h ear ly 2008, the parties were involved in leng thy

pretria l motions and discove ry , including two rounds of videota

ped depositions of witnesses who e ither li ve d in or we re inc arc e rate d in

Chi na . T he g ov e rnme nt, toge ther with De fenda

nts and their counse l, conducted the depositions from L as Ve g as, Neva da, via video link with the witnesses in China. Def endants c ross-e x ami ned ea ch witness. Def

endants waived t heir right to be present in China to confront the w itnesses fac e to fa ce.
After a 3 8

- d ay tr ia l ( f

r o m Ju n e 1 0 , 2 0 0 8 , to A u g u s t 29, 2008), the jury

convicted Defe ndants on all counts. The district court sentenc ed Chaofa n to 25 y ear s in prison, GuojunU NI TED S T A T ES V

. X U 10 to 22 y ear s, and Wan gfa n and Ying yi to 8 y ear s eac h. The court al s o sentenc ed ea ch def endant to thre e y ear s of supervised r elea se, and e ntere d re s tituti on order s totaling $482 milli on. Def

endants timely appea led to this court. The appea ls were assig ned to this panel and c onsolidated. We gr anted the g overnme nt’s motion to e xp and the r ecor d for this appe al to include 31 DVDs containingthe complete, unedited video de positions for all witnesses who appe are d at tr ia l.

II. De fend ant s’ Co unt One Ri c o C ons pir ac y C onv ic ti ons
A. Count On e Ac tivities
Viewe d as a whole, the ac t ivities subject to count one
e nc omp a ss a

un if ie d s c he me , w he re in the De fe nd ants : st ole
as much money as possible f rom the Ba n ko f C hina; tra n s fe rr edth e s t o l en fu n d s o u to f C h i n a; es cap ed , t h ro u gh immigration fraud, to a safe harbor in the United States; and then sp en t t h e funds in, amongother plac es, L as Ve g as casinos. De fenda

nts were thus eng ag ed in an international
e n t e r p r i s e , u s i n g m an y o f

t h e t o o l s o f t h e g l o b a l e c o n o m y. We theref ore c onsider RI CO’s application in a multinational
c on te xt.
B. Extrate rrit orial Appli cation of Rico
Def endants a rgue that their c ount one convictions are invalid beca

use the c harg ed conspira cy was e x trater

ritorial and outside the re ach of RI CO. We revi ew de novo a challeng e to the extraterr itorial application of c ri m i nal
s t atut es. See V

asquez-Ve lasco , 1 5 F

. 3 d 8 3 3 , 8 3 8

– 4 0 ( 9th Cir. 1994); see also United States v . Felix-G u t ierrez ,U NI TED S T A T ES V

. X U 11
94 0 F .2d 120 0, 12 03 –0 4 ( 9th Cir . 1 99 1) ; Chua Han Mow v. United States , 730 F.2d 1308, 1311 ( 9th Cir. 1984).

In Morrison v. Nationa l A u s tralia Bank Ltd. , 1 30 S. Ct

. 2869, 2875 (2010), the Supreme Court c onfronte dt he question whether

§ 10(b) of

the S ecur ities Ex chang e Ac t applies extraterr itorially

. The Court be g an its a naly sis under the pre mise that “[w]hen a statute g ives no clea r indication of
an ex trater

ritorial application, it has none.” Id. at 2878. The Court the n conclude d that, beca use § 10(b) contained no “af firmative indication” of extraterr itorial eff ect, it could not be applied e x trater

ritorially

. Id. at 2883.

In the wake of Morrison , t h i s circ uit has not considere d wh e the r R I CO a

pp lie s extr a te rr ito ri a lly

. We h ave pr e vio us ly held, howeve r, t h at RI CO is sil ent as to its ext rate rritorial application. See P oulous v. Caesars W orld, Inc. , 379 F.3d 654, 663 (9th Cir. 2004). Other courts that have addr essed th e i s s u e h av e un i f

o r m l y h e l d th a t R I C O d o e s n ot a pp ly extraterritorially

. Se e ge ne ra lly Nor ex P etroleum Ltd. v. Acc ess Indus., Inc

. , 631 F.3d 29, 33 (2d Cir. 2010); European Cmty. v . RJR Nabisco, Inc

. , 2011 WL 84 3 9 57,
a t *5 (E. D.N .YMar. 8, 20 11 ); In re Toyota Motor Corp. , 7 8 5 F

. S u p p

. 2 d 8 8 3 , 9 1 3 ( C

. D

. C a l. 2 01 1) ; So ro ta v . S os a , 84 2 F . Su pp . 2 d 1 34 5, 13 49 (S .D

. F la

. 20 12 ). Al tho ug h th os e c a se s a dd

re sse d th e c ivil r a the r t ha n th e c ri min a l RI CO statute , they

are faithful to Morrison ’s rationale: “Rather than gue s s anew

in eac h case , this Court applies the pr e sumpt ion [ag a ins t extra te rr ito ri a l a

pp lic a tio n] in

a ll c a se s, prese rvinga stable ba ckg round ag ainst which Congress can le g is late w it

h p r e d ic ta

b le e f f ects.” Morrison , 130 S. Ct . at 2881. There fore , we be g in the prese nt analy sis with a presumption that RI CO does not apply extraterritorially in a
c ivi l or c ri min a l c on te xt.U NI TED S T A T ES V

. X U 12
De fe nd ants argue that be c a us e RI CO do e s not a

pp ly
e xtrate rr ito ri a lly , th e g ov e rnme nt ca nn ot ap ply the statut e in this case be cause the conspira cy took place in China a

nd Ho n g K o n g , n o t th e U n it e d St a te s

. D e f e n d an ts d e f

ine the enter p r is e a s h av in g tw o p arts

. I n d e e d , D e f e n d an ts wer e char g ed here with me mbership in a criminal enter pris e t h at inv olved not only

embezzlement ag ainst the Ba nk of China that occu rre d in

Chi na and Ho ngKo ng(p art

on e ) b ut a lso imm ig ratio n fra

ud to e sc a pe to t he Un ite d St a te s w iththe ir ill-gotten g ains (par

t two). Acc ording ly , we must deter mine whether under the circ umstances of this case RI CO can be la wf ull y app lie d to a ny , o r a ll, of Defendan ts’ conduct—f

oreig n or domestic. See id. at 2884 (the “pre sumption here (a s often) is not self-evidently dispositi ve, but its application require s further analy sis.”).
C. De te r m ining RI CO ’s F oc us
Morrison frames the extraterr itorial in q uiry in terms of “the ‘ focus’ of cong ressional conce rn” in e nactingthe statute. Id. The Morrison Court further define d the conc ept of foc us in terms of the “ objects of the statute’s solicitude” a nd “th[e] transac tions that the statute seeks to re g ulate.” Id. (interna l quotation marks omitted). The inquiry into RI CO’s focus is far f rom clea r-c ut. See In reToy ota , 785 F. Supp. 2d at 914 (“ I t is unclear how Morrison ’s log ic, which evaluates the ‘foc us’ of the r eleva nt statut e , p re c ise ly

tr ans late s to RI CO .” ). The Se c on d Ci rc uit side-stepp ed t h e issue by

summarily

decla ring in Norex that the def endants’ “ slim conta cts with the United States . . . are insuffici en t to support ex trater ritorial application.” Norex , 631 F.3d at 33 (2d Cir. 2010). Given Morrison ’s deta i l edU NI TED S T A T ES V

. X U 13
anal y s is r e g ar d in g th e f

o c u s o f th e E xc h an g e A c t, h o w e v e r, our b e st p a th f

or wa rd is t o d e te rm ine RI CO ’s fo c us

. Cou rt s th a t h av e a d dr e s s e d th e i s s u e f a l l e s s e n t i a l l y

int o two c amp s

. O n e c amp a s s e rts th a t RI CO ’ s f o c u s is o nthe enter prise. See, e .g. , Cedeno v . Intec h Gr o u p , Inc. , 73 3 F

. Sup p. 2d

47 1, 47 3 ( S.D .N .Y . 2 01 0) ; European Cmty. , 20 11 WL84 39 57 , at *5 ; Farm Credit Leasing Servs. Corp. v. Krones, Inc. (

In re Le- Nature’s, Inc. ), 2011 WL2112533, at *3 n.7 (W.D. Pa. May

26, 2011) (a dopting the e nterprise

focuse d model but acknowledg ing that “RI CO may have more than one ‘foc us’—including , for e x ample, the pattern of
ra c ke te e ri ng a c tiv ity re qu ir e d by the statut e .” ); Mi tsu i O .S .K. Lines, Lt d. v. Seam aster Logist ics, Inc. , 20 1 2 W L1657108,
a t *4 (N .D . Ca l. M ay 10 , 2 01 2) ; In Re To yota , 78 5 F . Su pp . 2 d at 91 4; U

n i t e d S ta t es v

. To , 144 F.3d 737, 744 (11th Cir. 1998) (a

pre- Morrison c a se ); United States v. Ho y le , 122 F.3d 48, 51 (D.C. Cir. 19 9 7 ) ( a pre-Morrison
case ).
The other camp a sserts that RI CO’s focus is on the patter n of ra ckete eringactivity

. See, e .g. , Agenc y Holding v. M

alleyDu ff , 4 83 U. S. 1 43 , 154 (19 87 ) ( “ the he art of any RI CO complaint is the alleg ation of a pattern of r acke teer ing.” ) (e mph a sis in o ri g ina l om itt e d) ; Un ite d Sta te s v

. Ph ili p M orris USA, Inc

. , 783 F. Supp. 2d 23, 29 (D.D .C. 2011) (addr essing the po ssi bil ity

that do me sti c c on du c t cou ld pr ov ide the ba sis fo r a f or e ig n c or po ratio n’ s RI CO lia

bil ity ); CGC Holding Co. v. Hutche ns , 824 F. Supp. 2d 1193, 1209 (D. Colo. 2011) (c i t i n g Ph ili

p M orris , 7 83 F . Su

pp . 2 d at 29 ); Chevron Corp. v. Donziger , 2012 WL1711521, at *7–8 (S.D.N.Y. May 14, 2 0 1 2 ) ( qu o t i n g CGC Holding Co. , 824 F. Supp. 2d at 1209–10); In re Le-

Nature ’s Inc

. , 2011 WL2112533, at *3
n. 7; accord Note, R. Davis Mello, L i f e A f t e r Morrison :U NI TED S T A T ES V

. X U 14
Ex tra terr it or ial ity

an d R IC O , 44 V AND

. J. T R ANS NAT ’ L L. 13 85 , 1 41 1 ( 20 11 ) ( a

rgui ngtha

t c ourt s sh ou ld “ a

pp ly RI CO in any case wher e a plaintiff alleg es the c ommissi on of enoug h predic ate a cts in the United States within the statutory time period to establish a ‘pattern of r acke teer ing a ctivity ,’
e ve n if the ‘e nte rp ri se ’ is a fo re ig n e nte rp ri se or the sch eme i n v o l v es th e c o m m i s s i o no f p re d i ca t e a ct s i na f o re i gn jurisdiction.”).
We addre ss both models in t urn.
1. F oc us o n t he Ent e r pr ise
Two di strict courts in the S econd Circuit have c oncluded th a tth e f o c u s o f R IC O i s o nth e e n t e r

p r i s e

— s p e c i f

i c a l l y, do me sti c e nte rp ri se s.
In Cedeno , 733 F. Supp. 2d at 472, the d i s t ri ct court addre ssed extraterr itorial application of RI CO in a civil ac tion seekingdamag es ar ising out of a wid e- rang ing mone y launder ing scheme throug h which Ve nezuelan nationals used United States banks as c onduits for fra ud u lently obtained funds. The sc heme’ s contac ts with the Uni t ed S t ates were limit ed to t h e m o v ement of c urre ncy into and out of New York bank acc ounts. Id. After deter mining that the f

ocus of RI CO is on “the enterprise as t he recipient of, or cover for, a patte rn o f ra c ke te e ri nga c tiv ity ,” the c ourt he ld t hat “ RI CO does not apply

wher e . . . the a lleg ed ente rprise a nd the impact of the predic ate activity upon it a re entirely

fore ign.” Id. at 474.

In Eu ro pe an Com mu nit

y , 2011 W L 843957, at *5, the district court, upon examining the e lements of RI CO,
c on c lud e d th a t “ the statut e do e s not pun ish the pr e dic a te a c tsU NI TED S T A T ES V

. X U 15
of ra ckete ering activity

—indeed, each predicate act is, it self,
a se pa rate c ri me —b ut o nly

ra c ke te e ri nga c tiv ity

in
connec tion with an en terprise .” Thus, the “ object of [R I CO’s] sol icitude, and t h e foc us of the statute” is the enter prise. Id. (interna l quotation marks omitted). The cour t c on c lud e d th a t a

RI CO e nt erpr ise “ mus t be a do me sti c enter prise.” Id.

Determ i n i n g t h e geo gra p hic location of an e nte rp ri se —w he the r f

or e ig n or do me sti c —is a

dif fi c ult inquiry , howeve r. See Che vron , 2012 WL 17115 2 1 , at *6 (“ the e mph a sis on

wh e the r t

he RI CO e nte rp ri se is d ome sti c o r fore ign simply

beg s the question of how to dete rmine the enter prise’s c hara cter .”). Two district c ourts have a ddresse d the issue of deter

mining g eog raphic location by utiliz ing the “ner ve cente r” test. See E

uropean Cmty. , 2011 WL843957,
a t *5 –6 ; Mitsui O.S.K. L ines , 20 1 2 W L 1657108, at *4–5. Th e ne rv e c e nte r te st or ig inate d a s “ the ve hic le of c ho ic e ” in deter mining the principle place of busi ness for a cor poration when a naly zing a f eder al cour

t’s diversity

juri s d i ction. See European Cmty. , 2011 WL 843957, at *5 (interna l quotation
m ark s o m i t t ed ) ( ci t i n g Hertz Corp. v. Friend , 130 S. Ct. 1181, 1192 (2010)) . The ne rve c enter test focuse s on wher e the
e nte rp ri se ’s de c isi on s are mad e, as o pp os e d to c arr ie d o ut, and thus ce nters on the “ brains” o f an enterprise, not the “bra wn”. European Cmty. , 2011 WL 843957, at *6. European Community and Mi tsu i O .S .K. Lin es entailed a fairly straig htforwa

rd application of t he ner

ve ce nter test that
r e s u l t e d i nd i f

f e r e n tc o n c l u s i o n s r e g ar d i n g e x tr a t e r r i t o r i a l i ty. The Eu ro pe an Com mu nit

yc o urtc o n c l u d e d t h a t a m o n e ylaunder ing sc heme that or iginated in South America a nd Euro pe “ iss ue d f

ro m th os e c ri min a l or g anizatio ns loc a te d in South Am e r ic a

an d Ru s s ia

— n o t .

. . in

th e U n it e d

St a tes,”U NI TED S T A T ES V

. X U 16 and, conse quently , the enter prise wa s ext rate rritorial. 2011 WL843957, at * 2

– 3 , *7. Mitsui O.S.K. L ines involved a fra udulent shipp i n g scheme conce ived by United States
c o r p o r a t i o n s b u t e x e c u t e d p r i m ar i l y o v e r s e a s

. 2 0 1 2 WL 16 57 10 8, a t *1, *7. In th a t c a se , th e de c isi on makin g pr oc e ss of the c riminal enterpr ise “oc curr ed substantially within the territory of the United States,” and, thus, the en t erp rise wa s considere d domestic. Id. at *7.
Both c ourts emphasized the administrative e ase, fa mil iari ty , and c on sis te nc y of the ne rv e c e nt er te st. Eu ro pe an Cm ty ., 20 11 WL 84 39 7, a t *6 ; Mitsui O.S.K. L ines , 2012 WL1657108, at *5. B oth c ourts rea liz ed, howeve r, that
a pp lic a tio n o f t

he ne rv e c e nte r t e st c ou ld l e a d to “ art if ic ia lly simpli fied re sults,” Mitsui O.S.K. L ines , 2012 WL1657108,
a t * 4 , an d th a t “ h ar d c a s e s ” w i l l ar i s e th a t d o n o t “ in a ll instances, automatically g ener ate a result,” Eu ro

pe an Cm ty ., 2011 WL84397, at *6. Indeed, a s the S u p re me Court has noted, “it is a rar e case of prohibitedextraterritorial
a pp lic a tio n th a t la c ks all contac t with the territory of the United States.” Morrison , 1 30 S. Ct . at 2 88 4 ( e mph a sis in orig inal).
The c ase be fore us prese nts j u s t such a ha rd ca se that illumi nates the ina dequacy of the ne rve c enter

test and the enter prise-ba sed model upon which it re lies. As the Chevron court pointed out, the ner

ve ce nter test could “ produce absurd results” whe n applied to a hy pothetical cr iminal prosecution of two sepa

rate corpor ate e ntities—one fore ign a nd one domestic—both eng ag ed in the same pattern of cri m i nal activity in the territoria l Uni t ed States. See Che vron , 2012 WL1711521, at *6. The c ourt labele d “risible” the notion that the domestic corpor ation would be culpable wher eas the fore ign c orporation wo uld be immune from prose cutionU NI TED S T A T ES V

. X U 17
sim ply be c a us e its ri ng le a de rs ha d th e fo re tho ug ht t o incorpora te over seas. Id. T h i s i s s o un d re as o n i n g. The g eog raphic location of an enter prise may be re levant under c erta in fac tual scena rio s , like the cr iminal schemes at issue in European Community and Mitsui O.S.K. L ines. But in a ca se like this one, wher e the “ brains” of the oper ation
wer e lo cated overse as but the ente rprise violate d United States immi g ration law in the Un i t ed S tates, “the re is no
nece ssary or

. . . even pr obable c onnection betwe en whe re the RI CO enterpr ise makes i t s decisions and whe ther the application of RI CO to th e racketee ringactivity at issue . . . was the sor

t of activity with which Cong ress would have bee n conce rned.” Chevron , 2012 WL1711521, at *7. Moreove r, while a dmi n is tr a ti v e s im

p li c it y ma y b e “ a ma

jo r v ir tu e in a jurisdictional statute.” He rtz , 130 S. Ct. at 1193, a statute’s extraterritorial r each is a merits question, not a question of subject-matter

jurisdiction. See M

orrison , 130 S. Ct. at 2877 (“to a sk what conduc t [ a statute] rea che s i s t o ask what conduct [a statute] prohibits, whic h is a merit s question.”). Th e re fo re , a

n in qu ir y int o th e a

pp lic a tio n o f R I CO to Def endants’ c onduct is best conducte d by focusing on the pattern of Def endants’ rac ketee ring activity as opposed to the g eog raphic location of De fenda nts’ enter prise.
2. F ocus on the P atte rn of Rac ketee ring Activity “[T] he hea

rt of any RI CO complai n t i s the alleg ation of a patter n of ra ckete ering .” Agenc y Holding , 483 U.S. at 154 (e mph a sis in or ig ina l om itt e d) ; se e als o H .J . I nc . v . Nw . B e ll Tel. Co. , 492 U.S. 229, 236 (1989) ( descr ibing “ RI CO’s key require ment of a pattern of r acke teer ing” ). As noted, se vera l po st- Morrison c ourt s h ave de te rm ine d th a t RI CO ’s fo cus is on the p at tern of r acke teer ing a ctivity for pur poses ofU NI TED S T A T ES V

. X U 18 analy zing extraterr itorial application of the statute. Ph ili p Morris, Inc. , 7 83 F . Su

pp . 2 d at 29 ; CGC Holding Co. , 8 24 F. Sup p. 2d a t 12 09 ; Chevron , 2012 WL 1711521, at *7–8.

RI CO’s statutory

languag e and leg islative history support the notion that RI CO’s focus is on the pattern of r acke teer ing activity . For

example, 18 U.S.C. § 1962(c) , which for ms the basis of De fenda

nts’ count o n e convictions , prohibits the
con d u ct of a c riminal enterpr ise’s af fairs “ throug h a patter

n of ra ckete eringactiv i t y .” Other sections prohibit the use of funds der ived from a

pattern o f rackete eringactivity in the inv e stm e nt i n o r a c qu isi tio n o f an e nte rp ri se inv olv e d in interstate co m m erce. Id. §§ 1962(a) –(b). F urthermor e, RI CO’s leg islative history shows that the s tatute was enac ted to pr omote “the e radic ation of org anized crime in the United States by streng thening the legal tools in the evidenc eg a the ri ngpr oc e ss, by

e sta bli sh ingne w p enal p ro hib iti on s, and by pr ov idi nge nh anc e d s anc tio ns and ne w r e me die s to dea l wi th t

heun law ful ac tiv iti es of

tho se e ng a g e d in org anized crime.” Organized Crime Control Act o f 1970, Sta te me nt o

f F ind ing s a nd Pu rp os e , Pub. L . No. 91-452, 84 Stat. 922 (1970) reprinted in 1970 U.S. Code C o n g . & Admin. News 1073 (e mphasis added)

. Given this e x press leg islative intent to punish patter ns of organize d c ri min a l a c tiv ity in t he Un ite d St a te s, it i s h ig hly unlikely that Congr ess was unc oncer ned with the ac tions of for eig n enter

prises whe re those a ctions violated the laws of t h i s country

while the def

endants we re in this country

. See Chevron , 2012 WL1711521, at *6. Thus, to dete rm ine wh e the r D e fe nd ants ’ c ount o ne c onvic tions are wi thi n RI CO ’s ambi t, we loo k a t the patte rn of Defen da nts ’
rac ketee ringactivity

taken a s a whole.U NI TED S T A T ES V

. X U 19
3. App lic at ion to th e Ca se atHan d
The second s uperse ding indictment descr ibes two parts of the enter prise: (1) “ Enrichingthe member s and assoc iates . . . throug h among other things, fra ud, money launder ing, a

nd fore ign a nd interstate tra

nsfer of funds,” and (2) “E n ab ling the me mbe rs and a sso c iate s

. . . thr ou g h marr iage, pa ssp or t, and visa fr aud, to travel , amongother c ountries . . . [i ncluding ] t he United States , an dto flee China a nd Hong Ko ngin the e ve nt that the c ri min a l a c tiv ity of the En te rp ri se was discove red.” One pa rt consisted of ra ckete ering activities conduc ted pre dominan t l y in China, and one pa rt c on sis te d o f r a c ke te e ri nga c tiv iti e s in the Un ite d St a te s.
Th e fi rs t pa

rt c e nte rs on

the B ank of Chi na fr a ud and , to the e xt e n t i t w a s p r e d i c a t e d o n e xtr a t e r r i t o r i a l a c t i v i ty , i tis be y on d th e re a c h o f R I CO e ve n if the ba nk fr a ud re su lte d in some of the money rea chingthe United States. See Ce deno , 733 F. Supp. 2d at 472 (“ the sche me’s conta cts with the Un ite d St a te s .

. . we re lim ite d to the mov e me nt o f f un ds int o and out of U. S.- ba se d b ank a c c ounts .” ); Norex , 631 F.3d at 33 (“The slim conta cts with the United States . . . are insufficient to support e x trater

ritorial application of the RI CO statute.”).
Th e se c on d p art , h ow e ve r, bo un d the De fe nd ants ’
en t erprise to the terr itorial United States. This second pa rt involved rac ketee ringactivities conduc ted within the United States including the commission of RI CO predicat e cr imes based on violations of United States immigr ation l aws, a s c o d i f i e d i n1 8 U

. S

. C

. § § 1 5 4 2 , 1 5 4 6 ( a )

. S p e c i f i c a l l y, Def enda n t s enter ed the United States usingfra udulent visas and passpor

ts. Def endants traveled within t he United States to execute documents in fu rt h erance of their immigr ation fra ud and to open ba

nk ac counts. Fina lly , Def endants we reU NI TED S T A T ES V

. X U 20

arr e ste d in

Ka ns a s and Ok lahoma in pos se ssi on of the se fr a ud ule nt i mmi g ratio n d oc ume nts

. By conspiring to e nter and hide out in the United S t ates wi th t he fr uit of the ir ill -g ott e n g a ins , D e fe nd ants e ng a g e d in an ente rprise that had th e implicit goal to bre ach United States immi g ration law in fur thera nce of the ove ra ll goa l of the enter prise. The dual parts of Defe ndants’ ente rprise w ere nece ssarily

conjoined in pursuit of t h at g oal—i.e., to steal larg e sums of m oney from the Ba nk of China and to g et awa y with it in t he United States. De fenda nts intende dto use the immigration fraud to consummate the purpose of the enter prise: to acquir e the money and saf ely enjoy it the United S tates, beyond the re ach of Chinese law. Without the immigration fraud, the b ank fr aud would have been a dang erous f

ailure. S

e e, e

. g. , CGC Holding Co. , 824 F. Supp. 2d at 1210 (“In the present case , the conduc t of the e nte rp ri se wi thi n th e Un ite d St ate s w a s a ke y to i ts succe ss.”).

In sum, D efe ndants’ violations of United States immigration laws fall square ly withi n RI CO’s definition of
rac ketee ringactivity

. See 18 U.S.C. § 1961(1)(B ) (listing 1 8 U

. S

. C

. § § 1 5 4 2 , 1 5 4 6 a s R I C O p r e d i c a t e s ); cf

. R o cha v. United States , 288 F.2d 545, 548 ( 9 t h Cir. 1961) (sham marria g es i n violation of § 1542 are “cr imes directe d toward the sovere ign itself [ and] may be tried w ithin the jurisdiction even thoug h committed without”) (interna l quota t ion marks omitted). D efe ndants’ patter n of ra ckete eringactivity may have be en conc eived a

nd plann ed overse as, but it was
exe cu ted and pe rpetuated in the United States. Unde r Morrison , we look “not upon the pla ce where the decep tion orig inated,” but instea d upon the conne ction of the c halleng ed conduct to the pr oscription in the s tatute. 130 S . Ct. at 2884.U NI TED S T A T ES V

. X U 21

It was co nst i t ut i o nal err o r f o r t he jur y t o be i nst ruct ed on t he f i rs t pa rt 2

o f t he second s up ers ed i ng i nd i ct m e n t, to the ext ent t hat t hi s p art of t he i n di ct men t w as pr edi ca t ed on e x t r at er r i t or i al a ct i v i t y t h at i s n ot a ba s i s f or R IC O li a b ili ty. See H edgpe t h v

. Pul i do , 55 5 U

. S. 57 , 60 (20 0 8 ). H o wever, t he error was harm l e ss b eyond a reas o nab l e d o ub t as t he “evi d enc e w as overwhelmi ng” as t o t he second pa rt of t he second
s u per s edi n g i n di ct men t , an d t h e j u r y wou l d ha v e c on v i ct ed on t h e bas i s of tha t ev id e n c e a lo n e

. Uni t ed St at es v. G r een , 59 2 F.3d 10 5 7 , 10 7 1 (9t h C i r. 2 0 1 0 ). Havingdeter

mined that RI CO’s focus is on the pattern of
rac ketee ringactivity , we conclude that Def endants’ c riminal plan, which included violation of United States immigr ation laws wh ile the De fe nd ants we re in t he Un ite d St a te s, fal ls within the ambit of the statute.
We affir m Defe ndants’ count one c onvictions beca use the convictions are not based on an im proper extraterritorial application of RI CO, but rath er ar e based on a pattern of
ra c ke te e ri nga c tiv iti e s that we re c on du c te d b y the De fe nd ants in t he te rr ito ri a l U nit e d St a te s. 2

III. Defendan ts’ Count T wo Con victions f or Money Laun dering Consp iracy
Def endants c halleng e the suf fi ciency of the e vidence on their count two c onvictions for conspira cy in violation of 18 U.S.C. § 1956(h). We review sufficie ncy

of the e vidence chal le ng e s de novo to determine whether , “viewingthe evidenc e in the lig ht most favorable to th e p ro s ecution, any
ra tio na l tr ie r o f f

a c t c ou ld h ave fo un d th e e sse nti a l e le me nts of the c rime beyond a re asonable doubt.” Jac ks o n v. Vi rg ini a , 443 U.S. 307, 319 (1979) (e mphasis in ori g inal omi tte d) ; ac c or

d U nite d S tates v . Ne v ils , 5 9 8 F

. 3 d 1 1 58, 1163–64 (9th Cir. 2010) (e n banc)

.U NI TED S T A T ES V

. X U 22
Conviction unde r § 1956(h) with the object o f t he conspirac y

beinga violation of 18 U.S.C. § 1957(a) r equire s proof that Def

endants ag ree d to e ng ag e in a m o n etary t ransa ction over $10,000 derive d from a criminal act. See 18 U. S.C. §§ 19 56 (h ), 19 57 (a); Un ite d S tates v . A lgh az ou li , 517 F.3d 1179, 1190 (9th Cir. 2008)

. Def endants alleg e that the g ov e rnme nt i ntro du c e d n o e vid e nc e c onne c tin g the ir
mon e tary tr ans a c tio ns to a

ny the ft or fr a ud

. De fe nd a

nts a lso raise a j urisdictional challeng e to the application of § 1957(a)

. Def endants a rgue that the g overnme n t cannot tra ce the money used by the D ef endants in t he United States to any money obtain ed fraudulently

from the B ank of China, a nd that this inabili ty

to t ra ce is fatal to their c ount two convictions. Gene rally , a convic tion under § 1957 re q u i res that the g overnme nt be able to tra ce the money transactions at issue to a

criminal ac t. Un ite d States v . R utg ar d , 116 F.3d 1270, 1291–92 (9th Cir. 1997). The gove rnment conc edes that they are unable to tra ce the proce ed s o f the B ank of China fra ud direc tly

to the money

brought i nto the United State s. At

be st, the g ov e rnme nt c an s ho w on ly that th e “ va st majority ” of the funds in Ever J o i n t acc ounts were fra udulently obtained.

B ut D e fe nd ants we re c ha rg ed wi th c on sp ir a c y , a

c ri me that does not require completion of the objec t offense

. See United States v. Alvare

z-Cardenas , 9 02 F .2 d 7 34 , 73 6 ( 9th Cir. 1990) (“a

conspirac y

conviction does not t u rn o n the question o f whether def endant suc cee ds in doing a ll he
a tte mpt e d to do .” ). Th e c on sp ir a tor ia l a g re e me nt r e pr e se nts the cr y stalliz ation of the c o n s pirator’ s culpable c riminal intent; a ccomplishment of the underlying crime is immateria l to culpability

. United States v. Cruz , 12 7 F .3 d 79 1, 80 3 ( 9th Cir. 1997) (Ha ll, J ., concur ringin part and dissentingin part),U NI TED S T A T ES V

. X U 23 abrogated on other grounds by Uni ted States v. J imenez Re c io , 53 7 U. S. 27 0 (2 00 3)

. Contr ary to the Defendants ’ contention, no trac ing is ne cessa ry in this case. The ag ree ment itself establishes that the funds to be transfe rre d
are a po rt ion of the ill e g a lly deri ved pr oc e e ds . A ll that is require d h er e, whe re the crux of Def endants’ c ount two c onvic tio ns is that D e fe nd ants agreed to transfe r to the United States more than $10,000 in fraudulent proceeds , is that: there was an agree ment to transfe r that amount of the “fr audulent proc eeds” ; and Def endants’ c riminal i n t ent was corr oborate d by

“sig nificant objec tive acts.” United States v. Posey , 864 F.2d 1487, 1492 n.4 ( 9 t h Cir. 1989). A for mal ag ree ment is not neces s ary ; rather , the ag ree ment may be inferr ed fr om the defe ndants’ ac ts pursuant to the scheme , or other c ircumstantial evidenc e. Unite d S tates v . B ibb e ro , 749 F.2d 581, 587 ( 9th Cir. 1984). At trial, t h ro ug h the video deposition testimony of Z he nd on g and the dir e c t te sti mony of B ank of Chi na a ud ito rs , the g overnme nt introduced e vidence t h at Chaofan a nd Guojun eng ag ed in var ious acts of frau d d uring their tenure
a s man a g e rs a t th e Ka ipi ngsu b- br anc h. Th e y

e ng a g e d in unauthorized fore ign c urre ncy specul at ion. They

conce aled the imm e ns e los se s r e su lti ngfr om t hi s spe c ulatio n, a lmo st $150 mi ll io n , b y

ma n ip u lati n g B an k

o f Ch in a a c c o unt re c or d s

. C h a o f

an a lso a pp ro ve d lo ans , to ta lin g a

pp ro ximate ly $181 milli on, from the Ka iping s u b -bra nch to local Ka iping businesses that wer e not prope rly rec orded in th e Ba n k of Chi na a c c ounti ngsy ste m. T he int e re st p ay me nts for tho se loans wer e cha

nneled into Ever

J oint accounts, which were
c on tr oll e d b y

Cha of an and Guo

jun . T he g ov e rnme nt a lso introduced evidenc e of “fa lse loans,” totaling $90–95 milli on from the Kaiping sub-bra

nch, that wer e approve d by Chaofan
and int e nd e d f

or va ri ou s Ka ipi ng bu sin e sse s but w e re a c tua llyU NI TED S T A T ES V

. X U 24
diverted to Eve r Joi n t acc ounts. Zhe ndong testified that Chaofan a

uthorized th e l o an s, Guojun tracke d the money as it flowed into E v er J o int accounts, a nd all three men discussed the ne ed to a lter bank r ecor ds to conce al the
ma ssi ve los se s. The g overnme nt also introduced testimony reg ardingthe str uc tur e of the Ev e r Joi nt c omp any and its re latio n to Chaofan a

nd Guojun’s cr iminal activit i es. S pecif ically , the g overnme nt introduced e vidence that Chaofan w as the p r i m ar y o w n e r o f E v e r J o i n td ur i n g th e c o ur s e o f

i t s h i s t o r y. Z he nd on g te sti fi e d th a t he and Ch aofa n ma de fa lse repr esentations that the Bank of China owned Eve r Joi nt and
ma de pa y me nts us ingEv e r Joi nt f

un ds to i nf

lu ence at le a st one Chinese g overnme nt offic i al. The gove rnment’s
acc ounting e x pert testified that Ev er J oint had “no
commerc ial justification” but rathe r ser ved as a “conduit for fu nd s” in o rd e r f

or Ev e r Joi nt’ s p rincipa ls t o e ng a g e in activities consistent with money launder ing. Z h endong testified that Chaofa

n and Guojun were aw are of the corpor ate struc ture a

nd mission of Ever Joi nt a nd wer e aw are th at E v erJ oint would be funded f rom money

source d from the B ank of China. Z hendongtestified that he, Chaof an, and Guo ju np a id ana c c o un ta

n t, Y uH o n gb in , to ma

k e tr an s f ers fr om t he B ank of Ch in a

to E ve r Joi nt t o c ov e r e xpe ns e s. These tr ansfe rs involved the use of bank customer names a nd
acc ount information on officia l loan documents t o transfe r the loa n p ro c e e ds to Ev e r Joint thr ou g h “ un de rgro un d ba nk s” to evade China’s bankingregulators. Z hendongcharac t eriz ed this activity

as “stealing” the custom ers’ money from Ka iping
su b- br anc h ac c ounts and

tr ans fe rr ingthe mon e y

to E ve r Joi nt. Z hendongtestified that Chaofa n oversa w a tea m of
acc ountants, including Cha o fan’s cousin and his cousin’s wife, who altere d the ac count re cords to eva de dete ction.U NI TED S T A T ES V

. X U 25

A l t ho ugh D ef

end ant s al l ege t hat t hese real est at e i nvest m en ts were 3 l egi t i mat e, Z hen do ng t es t i f i ed t hat Chaof

an and G uoj un i mp r op er l y us ed B a n k o f C h ina a sse ts to fun d E v e r J o int’s re a l es ta te p u rc h a se s a s w e ll. To be sure , th e re c or d re fl e c ts that E ve r Joi nt e ng a g e d in
rea l e state investments that c ould ha ve been l eg itimate, including pur chase and re novation of re al estate i n Hong Ko n g. Z he nd on g te sti fi e d, ho we ve r, that sp e c ulation i n

3 fore ign c urre ncy

was g reater in volume than Ever J oint’s rea l estate r elated a ctivity . And the re cord r efle cts th at, from 19 95 –2 00 1, Cha of

an, wh o d e te rm ine d E ve r Joi nt b onus e s, rec eived 1.7 billion Hong Kong dollars ($218 milli o n U.S.) and Guojun rec eived 290.9 milli on HongKongdollars ($37.3 milli on U.S.) in E ver J oint bonus pay ments. Duringt he ent i re time they

worke d at B ank of China, Chaof an neve r ear ned more than $40,000 per y ear for his w ork with the bank and Guojun’s maximum s alar y was $30,000 pe r y ear

. Th e g ov e rnme nt a lso int

r o d u c e d e v i d e n c e that D e fe nd ants int e nd e d to tr ans fe r E ve r Joi nt f un ds int o th e Un ite d St a te s to fac ilitate esca

pe fr om Chinese authorities once their fr aud was discove red. Spec ifically , Z hendongtesti fi ed reg arding
an a g re e me nt b e tw e e n h im self, Cha of an a nd Gu oju n to transfe r millions of doll ars to Cae sars Palac e c as i no to fund their esc ape to the United States. This mone y ca me from Ev e r Joi nt a c c ounts

. De fe nd ants Wan fa

ngand Yi ng yi si mil arl y

e ng a g e d in activities that show their intent to conspire with Chaofan and Guojun to bring fra

ud u l ently obtained funds into the United States. Acc ording to Z hendong , Wanfang and Ying yi entere d into false marria g es to acquire residenc y status in the United States in order to flee there in the event their husbands’ ba

nk fra ud was discove red. The se fa lse marr iag es we re f acilitatedU NI TED S T A T ES V

. X U 26 by a Kai p ing g overnme nt clerk who testified that he ha d altere d marria g e re cords to re move evidenc e of Chaof an’s
marr ia g e to Wa

nf angand Gu oju n’ s ma rr ia g e to Yin g yi. Wa n fa ng ’s and Ying yi’s false ma rriag es with Americ an citizens wer e set up by

intermediar ies. Neither

Wanfangnor Ying yi ever

lived with their respective sham spouses a s husband and wife. Wanfang was naturalized as an A merica n citizen on J une 22, 2000, and she divorce d her f ake spouse on J uly 28, 2000. Ying yi was natur al i z ed on Nove mber 10, 1999, and she divorc ed her fake spouse on April 17, 2001. At th e t ime of their a

rre sts in S eptember

2004, Guojun and Ying yi had bee n reunited a nd wer e living in K ansas. By the ti me th e y w e r e ar r e s te d in O k la h o ma in O c to b e r 2 004, Chaofan a

nd Wanfanghad also be en re united.

Ev ide nc e int

ro du c e d at tr ia l a lso sh owe d th a t on a t le a st on e oc c a sio n Wanf

ang and Yi ng yi trave le d to L a s V e g a s w ith Chaofan a

nd Guojun and gambled w ith funds that, as d e s c r i b e d a b o v e , w e r e l i n k e d

t o E v e r J o i n t

. S p e c i f

i c a l l y, Def endants traveled to L as Ve g as on or a bout Oct o b er 4, 2000, and g ambled at the Rio and Be llag io c asinos using two milli on dollars dra

wn from the H ua Chao Commerc ial Ba nk in H on g Ko ng . T he se fu nd s w e re se nt t o the De fe nd ants in L as Ve g as via Wanfa

ng ’s brother , KwongWa Po, an d the funds wer e booked in Eve r Joi nt’s ledg er a s a loan.

In light of the fore g oing, viewing the evidenc e i n t he g overnme nt ’s favor , a rational juror could find that the Def endants violated § 1956( h) b y conspiringto defra

ud the Ba nk of China throug h activities related to the Ever J oint company and that they

conspired to e ng ag e in transactions with d o me s ti c c a s in o s u s in g mo r e th an$ 1 0 , 0 0 0 o f the illega lly derive d fund s. Conspiracy does not requir e c omp le tio n o f t

he su bs tanti ve c ri me . It r e qu ir e s a n inte nt t oU NI TED S T A T ES V

. X U 27 complete the substantive c rime. De fenda nts’ intent can
rea sonably

be infe rred fr o m their ac tions pursuant to the scheme . Section 1957(d)’ s jurisdictional require ment is met be c a us e the tr ans a c tio ns too k p la c e in t he Un ite d St a te s. There fore , we a ffirm De fenda nts’ convictions on count two.
IV. Defendan ts’ Count Three Convictions f or Conspi racy t o Transport Stolen Money Conviction for conspira cy to violate § 2314, count three , re qu ir e s p ro of bey on d a

re a so na ble do ub t th a t D e fe nd ants a g re e d to mov e a t le a st $ 50 00 int o th e Un ite d St a te s w hil e “knowingthe same to have been stolen, conver ted or take n by f r a u d

. ” 1 8 U

. S

. C

. § 2 3 1 4

. T h e c o un tt h r e e c o n s p i r a c y a lso
re qu ir e s at le a st one ov e rt a c t in f ur the ra nc e of the a g re e me nt. 18 U.S.C. § 371. We re view de novo De fe n d an t s ’ c h al l en ge to the sufficie ncy

of the e vidence , and we make a ll inferenc es in f avo r o f t he g ov e rnme nt.
De fe nd ants ra ise e sse nti a lly the same c ha ll eng e to t

he ir count three convictions as t hey did reg ardingtheir count two convictions—namely , that the g overnme nt cannot tr ace the L as Ve g as ca sino transac tions to t he B ank o f C hina fra ud. Their a rguments fail under

the same a

naly si s as discussed above. Conspira cy

is an inchoate offe nse that ce nters upon the ag ree ment to commit an unlawful act, not the c ommissi on of the unlaw ful ac t itself. Cruz , 127 F.3d at 803. Ther efor e, thi s c a se is d ist inguis ha

ble fr om United States v. Lazarenko , in which we r ever sed a c onviction beca use the substantive § 2 31 4 c ha

rg e re qu ir e s th a t th e tr ans fe rr e d mon e y be dir e c tly tr a c e a ble to t he un de rl yingfr a

ud . 5 64 F .3 d 1 026, 10 42 (9 th Cir. 2009).U NI TED S T A T ES V

. X U 28

D ef end ant s al so argue t hat t heir C o n f rontat i o n C l ause r i ght s were 4 vi o l at ed when t he vi d eo t ap ed d ep o si t i o n t est i m o ny was adm i t t ed wi t ho ut t he go vernm ent m aki ng a s ho wi ng at t ri al t hat t he wi t ness es were un ava i l abl e. As D ef

endan t s conc ede, howev er , t hi s ar gu ment i s wai ved We affir m Defe ndan t s ’ count thre e convic tions here be c a us e e vid e nc e in t

he re c or d, summa

ri zed a bo ve , s up po rt s a fi nd ingthat D e fendan ts a g re e d to c omm it the a c ts p ro h i b i t edb y

§ 2 3 1 4

. T h r o u ght h e t es t i m o n y o f Zh en d o n g, fo re ns ic a c c ounti nge xpe rt s, and De fe nd ants ’ f

a lse sp ou se s, t h e governme nt introduced e vidence sufficie nt to allow a
ra tio na l juro r t o f

ind that D e fe nd ants re a c he d ana g re e me nt t o ste a l la rg e sums o f m on e y

fr om the B ank of Chi na and to u se that money , channe led through E ver Joint accounts, in the Un ite d St a te s.
V. De fend an ts’ Six th Am e ndm e ntObj e c ti ons to th e Video Deposition Testim ony at Trial The g overnme nt presente d the jury with fourtee n day s of vid e o ta p ed deposition evidenc e involving w itnesses in China. During prese ntation of t he evidence, it became c lear that the video re play

was c onsuming a

larg e amount of c ourt time, resulting in de lay and juror fatigue. Acc ording ly , the district court, with the c onsent of all par ties , approved an e dited version of the videotapes to be shown to the jury . The e dited version omitted the translation into Chin es e of c ounsel’s qu e sti on s in En g lis h, but it le ft un a lte re d th e En g lis h questions, t h e witnesses’ response s in Chinese, and the En g lis h tr ans latio ns of

the Chi ne se re sp on se s.
De fe nd ants argue that th e edite d v e rs ion vio late d th e ir Six th Amendment rig hts to a fai r t rial and to c onfront the witne sse s a g a ins t th e m. B e c a u s e th e D e f

e n d an t s f a i l e d to 4U NI TED S T A T ES V

. X U 29

b e c a u se the y ra ise d it fo r the first tim e in the re p ly b rie f. See Ba z ua ye v. I

. N. S. , 79 F.3d 11 8 , 12 0 (9t h C i r. 19 9 6 ). object at t

h e ti me th e d e p o s it io nte s ti mo n y w a s intr o d

u c ed into e vidence , we revie w for plain err or. See U nited States v. Matus-Zayas , 655 F.3d 1092, 1101 n.7 ( 9th Cir. 2011).
Def endants raise t wo m ain cha lleng es to the pre sentation of t he videotape d testimony . First, they argue that they

wer e de nie d a fa ir tr ia l be c a

us e the re pla

y su bje c ted the jur

y to

“ b r u t a l l y b o r i n g ‘ s p urt s ’ o f v i d e o - t a p e d d e p o s i t i o nt e s t i m o n y, marke d by

computer diff

iculties, err oneous re dacti o n s , and confusingnames.” Second, Def endants argue that the e dited video de p o s i t ions impeded the jury ’s ability to observe the witnesses’ de meanor

and body

languag e while they

wer e beingasked que stions in t heir native languag e. Reg ardingthe fa ir t ri al arg ument, the par ties do not dispute that portions of the trial we re longor that juror attentiveness was an issue. Rec og nizi ng these proble ms, the district c ourt took ste ps to he lp the jury by clar if y i n g the
n am es and roles of the par ties, and by

placingin the courtroom a

fac e and name char

t of all rele vant per sons. The district court also addresse d juror attentivene ss by dismiss ing one of the alternate jurors who a ppear ed to be f

alling a sleep. These a ctions were rea sonable steps in mana g ing a leng thy
an d d if f ic u lt tr ia l. S

ee, e .g. , Un ite d S

tates v . S pr ing fie ld , 829 F.2d 860, 864 ( 9th Cir. 1987) (no abuse of discre tion wher e the district cour

t took steps to ensure t hat missed testimony was insubstantial).

Turn ingto D e fe nd ants ’ C on fr on tatio n Cl a us e argume nt, we r eiterate that the major pur poses of the Confro n t ation Clause ar e “( 1) ensur ing tha t wi tnesses will testify underU NI TED S T A T ES V

. X U 30

D e fen d a n ts’ ar g u m e n t t h a t t h e y ha v e b e e n d e p riv e d o f the o p p o rtu n ity 5 f o r meaningf

ul ap p el l at e revi ew beca use t he go vernm ent f ai l ed t o ent er t he vi d eo s i nt o t he reco rd has be e n m o o te d by our de ci si o n t o grant t he g ov er n men t ’ s mot i on t o e x pan d t h e r ec or d. oath; (2) f orcingwitnesses to underg o cross-e x amination; and (3) pe rmitting the jury to observe the demeanor of witnesses.” United States v. Sines , 761 F.2d 1434, 1441 (9th Cir. 1985) (interna l citations omit ted). The di s t rict cour t conducted a hear ing during trial on the problems posed by video re play

of the depositions. The district c ourt stated that editing the tapes would speed up the proce eding s while still allowing the jury to view the body

languag e of the witnesses as they responde d to q ue sti on s. On

thi s a pp e a l, w e g ra

nte d th e g overnmen ts’ mot ion to e xpand the re c or d to inc lud e thi rt y -o ne DV Ds wi th complete une dited versions of the de positions, an d we have revie wed that evidenc e. These DVDs reve al that the jury was expos ed to re levant witness body languag e and de meanor even taking into ac count the district cour t’s edit s. The fa ct that the Def

endants c onsented at trial to the edited for mat and par t i cipated in craf

ting the struc ture for

the edits furthe r milit ates a g ainst their asser tion that the jury

was de prived of the opportunity

to evaluate witness demea nor.
In s um, the di st ric t c ourt did no t pl a inl y

e rr in i ts tr e a tme nt o f v ide ota

pe d te sti mony

a t tr ia l, a nd De fe nd ants ’ rig hts under the Confr ontation Clause wer e not violated. 5

VI. Defendan ts’ ExpertWitnesses
Def endants c halleng e the district cour t’s ruling that lim ite d th e te sti mony

of thr e e de fe ns e e xpe rt

wi tne sse s: Professor J o h n Copper, Profe ssor Andy Sun, and Professor Victor Shih. The dis trict court’s decision to admit or excludeU NI TED S T A T ES V

. X U 31 expert testimony

is reviewe d for a

n abuse of discre tion. See United States v. Fre eman , 498 F.3d 893, 900–01 (9th Cir. 2007). Abuse of

discretion is eva luated by looking at whether the tr ia l c ourt

de te rm ine d th e c or

re c t le g a l r

ule to apply to the reque sted rel i ef and then at whether the trial court’s a pplication of that rule w as (1) “illogic al,” ( 2) “implausible,” or ( 3) without “ support in infere nces that may be dra wn from the f

acts in t h e re co rd.” United States v. Hinkson , 585 F.3d 1247, 1264 ( 9 t h C ir. 2009) (e n banc) (citation omitted).
“The admissibili ty

of expert testi m o n y

is a subject peculiar ly within the sound discretion of the trial judg e, who alone must decide the qualifications of the expert on a g iven subject and the extent to which his opinions may be require d.” Fineburg v. United States , 3 93 F .2 d 4 17 , 4 21 (9 th Cir . 1 96 8) . T he dis tr ic t c ourt c on du c te d a

n e xt ensi ve vo ir d i r e o f th e w i tn e s s e s o u t s i d e th e p r e s e n c e o f th e j ur y. Defendants soug ht to have Copper te stify about the economic a

nd political structure in Ch i n a at t he time of the Def endants’ c riminal activities at t h e Bank of China, a bout de fe nd ant Guo

jun ’s mil ita

ry se rv ic e , a

nd a bo ut C hin e se family structure and sociolog y . De fe n dants soug ht to have Sun testify

about the Ch i n es e leg al sy stem, and they soug ht to have Shi h te sti fy

a bo ut t he e ff e c t of Commun ist

Part y politics on Chi na’s banking sy stem, including the operation of the Ba nk of China. The district c ourt allowed Copper’s te sti mony on the c omp arativ e po lit ic a l and e c on omi c situations in C hina and HongKong , and allowe d brief discussion of defe ndant Guojun’s milit ary status. Howeve r, the cour t found Copper unqua lified to testify reg ardingthe
re spective r oles of spouses in China bec ause his experienc e o nth a ti s s u e w a s m e r e l y an e c d o t a l

. A f t e r a l o n g c o l l o q uy,U NI TED S T A T ES V

. X U 32
the c ourt a llo we d Sun’ s te stimo ny re g ard ingthe do ub le desig nation experience —wher eby persons suspec ted of
c r i m i n a l a c t i v i ty

ar e s u b j e c t e d t o i s o l a t e d , i n d e t e r

m i na te det enti on duringpendingadministrative and c riminal investigations. The distri ct cour t also allowed Shih’s testimony on “mon i t oringrooms”—rooms whe re ba nk officia ls monit or ac tiviti es at the bra nch and c onsider whe ther to pursue Communist P ar t y disciplinary

actions—and differ ence s betwee n private a nd state-owne d banks in China, but the court e x cluded his tes t i m o n y on out-of-book loa

ns beca use Shih di dnot actually revie w any

rec ords for the transac tions at issue in the case.

In allowing all t h ree defe nse witnesses to testify , the district court adhe red to c ircuit prec edent requiring that expert testimony

be “c onstrued l ibera lly ” in consider ing admissibili ty

. See U

nited States v. Hank

ey , 203 F. 3 d1160, 1168 (9th Cir. 2000). In light of the rea sons state d at the hear ing, the district court under stood i t s function as an
e vid e nti ary

g a te ke e pe r a

nd too k ser iou sly its re sp on sib ili ty to admit only

expert testimony

that wo u l d help the jury de te rm ine re le va

nt i ssu e s. Th e refo re , th e dis tr ic t c ourt did not abuse its discretion in limiti ng t h e testi mony of De fe nd ants ’ e xpe rt

wi tne sse s.
VI I. Jur y I nst r uc ti ons
De fe nd ants ra ise se ve n c ha lle ng e s to the jur y ins tr uc tio ns

. “ In r e vie wi ng ju ry

ins tr uc tio ns , th e re le va

nt i nq uir y is whether the instructions a s a whole are mislead i n g or inadequate to g uide t he jury ’s deliber ation.” United States v. Ga rc ia-Ri v e ra , 353 F.3d 788 , 7 92 (9th Cir. 2003) (interna l quotation marks omitted).U NI TED S T A T ES V

. X U 33

D e fen d a n ts’ ass e rtio n tha t de novo r ev i ew a ppl i es pu r s u an t t o Uni t ed 6 St at es v. Shannon , 1 3 7 F .3 d 1 1 1 2 , 1 1 1 7 (9 th C ir. 1 9 9 8 ), is inc o rr e c t. See Un ited S ta te s v . H e re d ia , 483 F. 3d 913 , 922 ( 9t h Ci r

. 200 7) ( en banc) ( ove r r ul i ng Shannon an d r ei t er at i n g t h e g en er al appl i ca bi l i t y of a bu s e of d i scr et i o n revi ew t o t he f o rmulat i o n of jury i nst ruct i o ns)

.
T he r ecor d re f

l ect s t w o o p po r t un i t i es f or pr es er vat i on of

t hi s i s s ue. 7 Fi r s t , D ef

endan t s r ai s ed an object i on t o t he gover nment ’ s proposed ins tru c tio n s o n c o u n t tw o . A fter c o n su ltatio n , ho w e v e r, D e fen d a n ts
w ithd re w the ir o b je c tio n , t h e re b y w a ivin g it

. Se e U n i t ed St at es v. M a st ers , 1 1 8 F .3 d 1 5 2 4 , 1 5 2 6 (1 1 th C ir. 1 9 9 7 ); Uni t ed St at es v

. Thom as , 896 F. 2d 589, 591 ( D

. C. Ci r

. 1990)

. D ef en dan t s ’ s eco nd obj ec t i on b ec am e m oo t wh en t he di s t r i ct cour t decl i ned t o gi ve t he cha l l eng ed i nst ruct i o n. T hu s, D ef end ant s d i d not p rop erl y preserve t hei r burde nshif t i ng ch all en ge , an d p l ain err o r rev i ew ap p l i es. A. Bur de n ShiftAr gum e nt
De fe nd ants argue tha

t the inc lus ion

of tw e nty sta te me nts of wh a t th e g ov e rnme nt d id n ot h ave to p ro ve to me e t c e rt a in el e me n ts o f th e c h ar g e d o f f e n s e s im p e r mi s s ib ly s h if

te d the burden to the de fense by lessening the g overnme nt’s burden of proof . Def enda n t s also alleg e that the district cour t erre d in failing to include spec ific languag e in the jury instructions that the Def

endants must be p re s u m ed innoce nt “unless and
un t i l ” p r o v e ng u i l ty.
Chal le n g e s to th e f

o r mu lati o no f

ju r y in s tr u c ti o n s are g ener ally revie wed u n der a

n abuse of

discretion standa

rd. 6 See U nited States v. De aring , 504 F. 3 d 897, 900 (9th Cir. 20 07 ). Pla in e rr or

re vie w a pp lie s here , h ow e ve r, be c a us e Def endants did not ade quately prese rve the burden- shifting iss ue fo r a

pp e a l. 7
The district cour

t repe atedly instructed the jury reg arding the cor rec t burden of pr oof. Specific ally , the instructionsU NI TED S T A T ES V

. X U 34
ref err ed to the pr esum ption of innocenc e and the g ov e rnme nt’ s b ur de n to pr ov e g uil t bey ond a re a so na ble do ub t. T he dis tr ic t c ourt

a lso ins tr uc te d the jur

y that a g uil ty verdic t must be unanimous, and that the De fenda nts’ decision
no t to te sti fy

sh ou ld n ot b e us e d to inf e r guil t. D espi te conclusory al l egations, De fenda nts do not show how the tw ent y refe re nc e s to wh a t th e g ov e rnme nt d id n ot h ave to prove le ssened the g overnme nt’s burden of proof.

Fur thermore , the Def

endants’ alleg ation that the district court e rre d in failing to i n cl u d e specific languag e that the De fe nd ants are to b e pr e sume d inn ocen t “ un le ss a nd un til ” p r o v e ng u i l ty i s un av a i l i n g

. D e f e n d an t s ’ o w na

u th o r i ty, Rh oa de s v . H e nr y , 5 98 F.3d 495, 506–08 ( 9th Cir. 2010), subverts their a

rgument. T he Rh oa de

s court prof

essed no pr e fe re nc e fo r D e fe nd ants ’ des ir e d “ un le ss a nd un til ” lang uag e. See id. M o re o v er , ev en i f o m i t t i n g s u ch l an gu age wa s e rr on e ou s, wh e n r e a d in the c on te xt of the ov e ra ll instructions, it is unlikely that the omission would cause the jury to misapply

the g overnme nt’s burden o f p roof. See id. at 508.

B. Jury Instruction Based on Chinese Law
Over Def endants’ objection, the district court g ave the following jury

instruction: “You are instructed that fr aud, or a sche me or attempt to defraud the Ba nk of China is a fe lony
un de r f or e ig n Ch ine se law. ” De fend ants argue that th is instruction was improper

beca use it: (1) took awa

y from the jury the ability to f

ind a n essential element of the allege d crimes, ( 2) interpr eted a nd soug ht to enforc e unsettl ed Chinese law that is diffe rent fr om law applied in the United States, and (3) based its c onclusions on extradition ca se law,U NI TED S T A T ES V

. X U 35

In rel evant p art , R ul e 2 6

. 1 st at es, “[i ]s sues of f o rei gn l aw are q uest i o ns 8

o f l aw, b ut i n de ci d i ng s uch i ss ues a court m ay co nsi d er any rel evant mat er i al or s our ce- - i ncl udi ng t es t i mo ny - - wi t hout r ega r d t o t he Federa l Rul es of Evi den ce

. ” Fe d. R. Cr i m. P. 26. 1. wh ic h li be ra lly

c on str ue s c ri min a lity

in vio latio n o f t

he ru le
o f l e n i ty.
We review de novo all deter minations of foreig n law under Rule 26.1 of the Fe dera l Rules of Criminal Procedure

. Se e Un ite d S

tates v . F owl ie , 24 F.3d 1059, 1064 ( 9th Cir. 19 94 ). Rul e 26 .1 g ive s th e dis tr ic t c ourt br oad disc re tio n in considering evidenc e to make determinations of for eig n law. 8 Se e Un ite d S

tates v . M itc he ll , 985 F.2d 1275, 1280 ( 4th Cir. 1993).

T o s u p p o rt a co n v i ct i o n o n th e R I C O co n s p i ra c y c h ar ge in c ount o ne and

the mon e y

la un de ri ngc on sp ir a c y

c ha rg e in count two, the g overnme n t wa s required to prove that the proper ty at issue (the f

unds from the B ank of China) was derive d from a spe cified unla wful ac tivity

. T h e specified
un lawf ul a c tiv ity

the g ov e rnme nt i de nti fie d w a s a n o ff e ns e ag ainst a for eig n nation involving “f raud, or an y s cheme or
a tt e mp t t o d e f

r a u d , b y o r a g a in s t a

f o r e ignb ank.” See 18 U.S.C. §§ 1956(c)(7) (B ) & (B )(iii), 1957(a ).

De fe n d an t s ci t e n o ca s e l aw i n s u p p o rt o f th ei r c h al l en ge to t he dis tr ic t c ourt ’s a

uth or ity to d e te rm ine fo re ig n lawa s a predic ate to jury

deter mination of g uilt on a substantive offe nse. Given Rule 26.1’s express g rant of a uthority to the di st ri ct court , “ [i]t ha s lo ngbe e n th ou g ht .

. . that th e jur y is not the appropr iate body

to determine issues of

fore ign la

w.” Un ite d S tates v . M c Cla in , 593 F.2d 658, 669 n.17 ( 5th Cir. 1979) (inter

nal quotation marks omitted). The cha l l eng edU NI TED S T A T ES V

. X U 36
instruction here d o es not impinge on the jury ’s fa ct finding b e c a u s e th e ju r y w a s s ti ll c h ar g e d

w it hd e te r mi n in g b e y ond
a re asonable doubt whether the under lying fraud a ctually took place

. Def endants’ othe r cha lleng es base d on the “unse ttled” nature of Chinese law and the district c ourt’s relia n ce on extradition cases ar e similarly unavailing . I t is true that extradition t reaties are construed liber ally , see U nited States v. Kin-Hong , 110 F.3d 103, 109 (1st Cir. 1997); howeve r, the
ru le of le nit y is n ot h e lpful to De fe nd ants be c a us e the ru le
a pp lie s w he re the re is ambi g uit y c on c e rn ingthe a

pp lic a bil ity of cr iminal statutes. See Lipar ota v. United States , 47 1 U .S. 419, 428 (1985); United States v. Gonzalez-M endez , 150 F.3d 10 58 , 1 06 1 ( 9th

Cir . 1 99 8) (“ [W]e r e so rt

to t he ru le of le nit y on ly if the statut e is ‘ tr

uly ambi g uo us .’ ” ). No su c h ambi g uit y exis ts here. A merica

n law provide s a st raig htforwa rd de fi nit ion of c omm on fr a ud a s, “ wr on g ingon e in h is p ro pe rt y ri g hts by dis ho ne st m e tho ds or sc he me s, and

us ua lly signif[ies] the deprivation of something of value by trick, dece it, chicane or over

rea ching .” See M

cNall y v. United St a t es , 483 U.S. 350, 359 (1987) (c itation and internal quotation marks omitted), supersede d on other groun ds by sta tute , Anti-DrugAbuse Ac t of 1988, Pub. L . No. 100-690, § 7603, codified at 18 U.S.C. § 1346, as recognized in United States v. Stoneman , 870 F.2d 102, 105 n.2 ( 3d Cir. 1989).
Chi ne se law i s e qu a lly

c le ar i n p ro hib iti ngfr a

ud ule nt a c ts. Articles 192 a n d 382 of the Criminal L aw of the People’s Re pu bli c of Chi na un ambi g uo us ly

c ri min a lize De fe nd ants ’U NI TED S T A T ES V

. X U 37

A rti cle 19 2 , i n rel ev an t p art, p ro vid es that “[w]ho ev er, f o r t he p urp o se 9

o f il l egal pos s es s i on , u n l aw f u l l y r ai s es f

u n ds by me an s of

f r au d s h al l be [g u ilt y of a cri m e]. ” C ri m

. L. P R C art

. 19 2 (ado p t ed by t he Fif t h N at ’l P eo p l e’ s C o ng. , J ul y 1 , 1 9 7 9 , revi sed M ar. 1 4 , 19 9 7 ) ( C hi na) avai l abl e at h t t p: / / ww w. ce cc

. g ov / pag es / n ew La ws / cr i mi n al La wEN G

. ph p.

A rtic le 3 8 2 , i n re le v a n t p a rt, p ro v id e s tha t “[a ]n y sta te fun c tio n a ry, who, by t aki ng adva nt age of hi s of f i ce, appro p riat es, s t eal s or s wi ndl es publ i c money or propert y or by ot her means i l l ega l l y t ake s i t i nt o h i s own pos s es s i on s h al l be r eg ar ded as be i n g g u i l t y of e mbez zl eme n t

. ” Cr i m. L. PR C ar t

. 382 ( adopt ed b y t h e Fi f t h N at ’ l Peopl e’ s Cong

. , J u l y 1, 1979,
r e v i s ed M a r

. 1 4 , 19 9 7 ) ( C h i na) a vai l abl e a t h t t p: / / ww w. ce cc

. g ov / pag es / n ew La ws / cr i mi n al La wEN G

. ph p.

See C rim . L . P R C a rts. 1 9 3

– 9 5 , 2 6 6 (a d o p te d b y th e F ift h N a t’l 10 P eopl e’ s Co ng

. , Ju l y 1, 197 9, r evi s ed M ar

. 14, 199 7) ( C hi na) (cri m i nal i zi ng f

raud aga i nst ba nks and fin a nci al i nst i t ut i o ns regardi ng l o an s , f i n an ci al bi l l s , a n d l et t er s of c r edi t , a s w el l a s c r i mi nal i zi ng swi n d l i ng o fp u b l i c o r p r i v a t e mon e y ) avai l abl e a t h t t p: / / ww w. ce cc

. g ov / pag es / n ew La ws / cr i mi n al La wEN G

. ph p. fra udulent acts a g ainst the Ba nk of China. N o ti n c i d e n t a l l y,

9 fo ur oth e r a rt ic le s in the Chi ne se c ri min a l cod e wo uld e qu a lly
c ov e r the De fe nd ants ’ c onvic te d co nduc t. C o n s e qu e n t l y, 10 De f e n d an ts ’ ar g u me n ts b a s e d o n th e s h o rtc o mi n g s o f the Ch i n e s e c r i m i n a l j u s t i c e s y s t e mf a i l b e c a u s e D e f e n d ants ’ fra udulent acts a

re unla wful in both the United Stat es and China.
Def end ants ’ alter

native ar g ument that the g overnme nt impermissibly

seeks to e nforc e Chinese law is me ritless. The Supreme Court has uphe ld criminal convictions b ased on interpre tations of fore ign law wher e the f oreig n violations are simply a mea ns to violate United States laws. See P a squantino v. United States , 5 4 4 U. S

. 3 4 9 , 3 6 9 (2 0 0 5 ). In thi s c a se , D e fe nd ants ’ f

or e ig n f ra ud wa s a me ans to v iolate United States laws. The c halleng ed instruction incorpor atesU NI TED S T A T ES V

. X U 38 Chinese law only

as a pr edicate to enfor ceme nt of the money launder ing statute.
C
. F a t a l V a r ia nc e R e g a r di ng C o un tTw o
De fe n d an t s ch al l en ge t h e o m i s s i o no f th e p h ra s e “ fo re i gn commerc e” f

rom the first ele ment in t he count two money la un de ri ngins tructi on . T he c ha lle ng e d in str uc tio n s tate s, “The elements of mone y launder ing, as cha rg ed in the sec ond sup e r s e d in g in d ic tm e n t, ar e a s f o ll o w s : F ir s t, anin d ividua l eng ag ed in or attempted to eng ag e in a monetary transac tion in or aff ecting interstate commerc e.” Def endants a lleg e that this omi ssion is a fatal varia nce r ender ing the ir conviction on that c ount inv a lid

. B e c a

us e De fe nd a

nts did no t ob

je c t a t tr ia l,
we r eview f

or plain er

ror.
Def endants’ challeng e amounts to a “ constructive
ame ndme nt” c la im, a lth ou g h De fe nd ants do no t us e that te rm

. A co nstructive ame ndment require s reve rsal and oc curs “whe n the cha

rg ing te rms of the indictment ar e altered, e ither literally or in eff ect, by the prosec utor or a co u rt afte r the grand jury

has last passed upon the m.” U n ite d States v. H a rtz , 458 F.3d 1011, 1020 ( 9th Cir. 2006) (interna l quotation marks omitted).
Def endants’ a

rgument fa i l s for two reasons. F irst, the
o m i s s i o nwa s cu re d

b y a l at er i n s tru ct i o no nth e s am e p age th at define s monetary

transac tion, as used in the cha lleng ed instruction, as a “ deposit, withdrawa l, transf er or exchang e, in o r a f f e c ti n g inte r s tate o r f

o r e ign c o mm e r c e .” The i n s tru ct i o n s o nt h ats a m e p age al s o re fe re n ce “f o re i gn commerc e” two a ddition al t i mes. Second, we consider the ph ra s e “interstate or f

oreig n commerc e” to be a unitary phrase ; th at is, by

ref ere ncingone, the other

is included asU NI TED S T A T ES V

. X U 39
well. Se e Un ite d St at es v. G arc ia , 94 F.3d 57, 64 ( 9th Cir. 1996) (de scribingthe phra se “inter state or f oreig n c o mm e r ce” as “one conce pt”).

Be cause Def

end ants wer e not convicte d at trial of a n of fe ns e br oa de r t

ha n th e on e c harged in t

he ind ic tme nt, De fe nd ants ’ f

a ta l va ri anc e /c on str

uc tiv e am e ndme nt c la im fails. Se e Ha rtz , 458 F.3d at 1020.

D. Defendan ts’ P roposed “Theory of Defens e” Ins tr uc ti ons
The de n i al of a de fenda nt’s jury instruction due to an inadequate fa ctual basis is revie wed f or an a buse of discretion. See U

nited States v. Daane , 475 F.3d 1114, 1119 (9th Cir. 2007). Whether t he ins tructions, taken as a whole, adequately

cover the def ense the o ry i s a question of law revie wed de novo

. Se e Un ite d S tates v . W ill s , 88 F.3d 704, 715 (9th Cir. 1996). At trial, the De fenda

nts requeste d an instruct i o n on the
nece ssity defe nse, base d on the De fe ndants’ conte ntion that the ir imm ig ratio n to the Un ite d St a te s u sing fr a ud ule ntl y ob ta ine d v isa s w a s d

ue to f e ar o f har m if

the y re ma ine d in Chi na a ft e r b e ingc a

ug ht.

De fe nd ants inv ok e ne c e ssi ty witho ut p ro pe r l e g a l ba sis

. Fe ar of prosec ution for cr imes committed is not an appropr iate re ason to claim nec essity

. Cf. United States v. Schoon , 971 F.2d 193, 196–97 ( 9th Cir. 1991) (discussing pe rm iss ib le us e s o f t

he ne c e ssi ty

de fe ns e in c a se s su c h a s: pri s o n er s esca

ping a burningprison, a per son stealing food from a c abin to s u rv i v e if lost in the woods, and destruc tion of prope rty

to preve nt the sprea d of fire ).U NI TED S T A T ES V

. X U 40
Def endants a lso requested three r elated instruc tions reg ardingg overnme ntal authorization based on the a lleg ation that th e ir ill e g a l mo ne y

tr ans a c tio ns we re du e to r e qu ir e me nts put in place by

Chinese Communis t P ar ty leade rship. De fe nd ants ba se the ir

argum ent on the fa c t th a t th e state ow ne d th e B ank

of Chi na and the fa c t th a t the Chi ne se bankingsector w as in a period of t ransition at t he ti me of the convicted of

fense s. The ins truction is unnece ssary , howeve r, be c a us e the e le me nts of

the c ha rg e d c on sp ir a c y

a de qu a te ly
cover ed a n y

claim of Chinese g overnme nt approva l of Def endants’ a ctions. I f the ju ry believed that the money transac tions at issue were not fraudule nt beca use the g overnme nt approve d the transa cti ons, the jury could have found for the Def

endants unde r the e lements of money launder ing a

nd transportation of stolen mon ey

. See U nited States v. Ramirez , 710 F.2d 535, 543 ( 9th Cir. 1983) (“The ref usal to g ive a r equeste d instruction is not e rr o r i f the char g e as a

whole ade quately

cover s the theory

of the defe nse.” ( citation and interna l quotation m arks omit ted)). Mo re ov e r, De fe nd ants provid e d n o e vid e nc e that th e ir immigration fraud wa s in any way connec ted to a g overnme nt direc tive. S

e e U n i t e d S ta t es v

. Do rre ll , 758 F.2d 427, 430 (9th Cir. 1985) (whe re the evidenc e is insuff icient to support a theor y of def ense, t h e d i strict court ne ed not instruct the jury on that defe nse). The district c ourt did not err in refusing to g ive De fe nd ants ’ p ro ff e re d d e fe ns e the or

y ins tr uc tio ns

. E. The Aidi ng and Abetting Counts
Def endants a rgu e that any

conviction for a iding a nd abettingin the conspirac y counts (counts one t hroug h three ) should be reve rsed be cause aidi n g and abetting wa s not char g ed on those c ounts in the second super sedi ngU NI TED S T A T ES V

. X U 41
indictment. Plain err or review applies beca use no obj ection
wa s ma de a t tr ia l.
The a iding a

nd abettingch ar ges , under 18 U .S.C. § 2,
a pp lie d to c ounts fo ur thr ou g h fi ft e e n on ly . D e fe nd ants a dmi t that the jury was instructed on aiding and abettingo n l y for counts four through fiftee n. J uries are pre sumed to follow the instructions give n them. Se e Ri c ha rd so n v . M ar sh , 4 81 U. S. 200, 206 (1987). The re is no er ror he re.
F
. The Absence of an Instructio n Def inin g “On or About”
Def endants challeng e the a bsence of an instruc tion defining“on or a

bout” as us ed in the second supe rseding indictment. Although Defe ndants did not propose an “on or about” instruction at trial, Def endants now argue that such a n instruction was nee ded to provide the jury wi th “suffic ient g uidance ” to navig ate the time f rame s involved in the char g ed crimes. De fenda

nts did not obj ect at trial, so we re v iew for plain err or.
Def endants c ite Un ite d S

tates v . M c Cow n , 711 F.2d 1441, 1450–51 (9th Cir. 1983), and United States v. ZepedaMartinez , 4 70 F .3 d 9 09 , 9 12 n. 1 (9t h Ci r. 20 06 ), but th os e case s are inapposite. They conce rn cha lleng es to crimes
c ha rg e d d ur inga lle g e dly

op e n- e nd e d o r i nd e fi nit e time frames. In this c ase, the dates alleg ed are not indefinite. The RI CO conspirac y was alleg ed to have begun in 1991 with the improper foreig n curr ency exchang e spec ulation that resulted in u nla wf ul u se of the B ank of Chi na ’s int e rb ra nc h a c c ounts and to h ave e nd e d w iththe arr e sts of Cha of an a nd Ku angin 2004. The c onspiracie s alleg ed in counts t wo and thre e beg an in 1998 and ended wit h the s ame arre sts in 2004. C ounts fourU NI TED S T A T ES V

. X U 42

D ef end ant s al l ege t hat t hey p res e rv e d th is c lai m of error duri ng t he 11 jury i nst ruct i o ns heari ng. T he co l l o q uy , how ever, de al t o nl y w i t h the j ury i ns t r uct i ons i n gen er al and di d n ot r ef er enc e t he C hi nes e l ang uag e i s s ues sp e c ifi c a lly e n o u g h to p re se rv e the issu e fo r ap p e a l. See Uni t ed St at es v. K l i ng er , 12 8 F.3d 70 5 , 71 1

– 1 2 (9t h C i r. 19 9 7 ). throug h fiftee n alleg e that the va rio u s ac t s of immigration fr a u d o c c ur r e d o ns p e c if

ic d a te s

. D e f

e n d an ts d o n o t a

r g ue that the g overnme nt pr esente d evidenc e outside t h e d ates outli ne d in

the ind ic tme nt o r oth e rw ise de viate d fr om t he tim e frames alleg ed in the indictment. Acc ording ly , we fi n dno err or.
G. Defendan ts’ Incom prehensibi lity Claim s Due to Num erous Chinese Nam es P rese nted to the Jury

De fe n d an t s ch al l en ge t h e f a i r n es s o f t h e p ro ce ed i n gs b a s e d o nth e nu m e r o u s C h i n e s e n am e s b e f o r e th e j ur

y. De fe nd a nts argue th at th e na me s a re e sse nti a lly intercha ng eable and incompre hensible to any juror who is not fa mil iar w ithChi ne se , th

us re nd e ri ngthe char gin g pr oc e ss incomprehe nsible. Plain error review applies bec ause no ob je c tio n w a s ma de a t tr ia l. 11

We are not persuade d by Def endants’ argu m ent. The parties e ng ag ed in voir dire, which i n cluded a jury questionnaire inquir i ng about any prospec tive bias or difficulty with the fac t that the def endants we re Chinese

. Severa l interprete rs wer e p re s en t during trial. The district court a lso took steps to cl ar i fy the names a

nd roles of the parties by placingon display in the courtroom a char t with the fac es and na

mes of all re levant per sons. Furthe rmore, Def endants point to n o specific evidenc e of pr ejudice
wa rr anti ngre ve rs a l on

the se g ro un ds

.U NI TED S T A T ES V

. X U 43

In sum, Defe ndants ’ seve n challeng es to the jury ins tr uc tio ns are me ri tle ss.
VIII. Sentencing Issu es
A. Appli cation of the 2007 Sentencing Guidelin es
Def endants a

rgue that the a

pplication of the 2007 Guidelines t o t heir sente nces violate s the Ex Po st F ac to Clause of t h e C onstitut ion. We review de novo the district court’s inter

pretation of the SentencingGuidelines, including challeng es under the Ex Post Facto Clause. United States v. Staten , 466 F.3d 708, 713 ( 9th Cir. 2006).
Th e dis tr ic t c ourt “sh a ll u se the Gu ide lin e s Ma nu a l in eff ect on the date that the defe ndant is sentence d” unless such application violates the Ex Post F acto Clause. U.S.S.G. § 1B1.11 ( 2011). An ex post facto sen t encing violation
occur s when application of a later edition of t h e G u i d elines would result in a hig her ba se leve l. S ee Un i t ed States v. Rising Sun , 522 F.3d 989, 993 n.1 ( 9t h Cir. 2008). The ex post facto issue arises he re be cau se the sente nces that the Def endants re ceive d under the 2007 Guidelines were long er than the sente nces the y

likely would have r ece ived under
e ar li e r G u id e li n es. Compare U.S.S.G. § 2B1.1(a ) (2007) (base offe nse level of either 6 or 7) with U.S.S.G. § 2B1.1( a) (2000) ( base of

fense level of 4). The district c ourt found that the cha rg ed conspiracy

extended beyond November 1, 2001, and thus it applied the ame nded Guidelines w ith the highe r ba se of fe ns e le ve ls.
Def endants a rgue that the second supersedingindictment alleg ed two separ ate gr oups of cr iminal activities—the Ba nk of Chi na fr a ud and the imm ig ratio n f

ra ud —a nd that th e dateU NI TED S T A T ES V

. X U 44
of the last ac tiv i t y as sociated w ith the Ba nk of China fra

ud
e n d e d p r i o r t o t h e i m m i g r a t i o nf r a u d

. S p e c i f

i c a l l y, Def endants a lleg e that any

conspirac y

to transport money associate d with their bank fr aud ende d when Chaof an and Guojun crosse d the borde r into the United States on Octobe r 15, 2001—befor e the November 1, 2001, eff

ective date of the
ne w Guid e lin e s.
Def endants’ a

rguments are unpersua sive bec ause, contra ry to Defe ndants’ asse rtions, the second su perse ding indictment did not alleg e two separ ate conspiracie s. I nstead, it a l l ege d a sing le RI CO conspirac y with two purposes: the B ank of China

fr a ud and imm ig ratio n f

ra ud . D e fe nd ants c on sp ir e d to ste a l mo ne y

fr om t he B ank of

Chi na and the n to trave l to the United S t at es with their ill-g otten g ains. The char g ed conspira cy encompa ssed both the Def endants’ f raud in Chin a, including illeg al money transac tions and transportation of stolen money , and the Defendants’ later immigration fraud to esc ape to the Unit ed States to flee Chi ne se law e nf

or c e me nt.
“C o nspiracy

is a continuing crime,” Pe op le of T e rri tor y of G ua m v . I

gn ac io , 852 F.2d 459, 461 ( 9th Cir. 1988), and a conspirac y

d o es not automatically terminate be cause the g overnme nt has defeated the conspirac y ’s objective, see J im e ne z R e c io , 537 U.S. a

t 274. Neve rtheless, the dur ation of
a c on sp ir a c y

c ann ot b e ind e fi nit e ly e xten de d “me re ly be c a us e the conspira cy

is kept a sec ret, an d mere ly beca use the
c on sp ir a tor s ta

ke ste ps to b ur

y the ir tr a c e s, in o rd e r t o avo id detec tion and punishment.” Grunewald v. Un i t ed Stat es , 353 U.S. 391, 397 (1957). A conspira cy

to conceal cannot be implied from circ umstantial evidence supporting the exis t en ce of anU NI TED S T A T ES V

. X U 45

ag ree d-upon cover

up afte r the c entra l purpose of a conspirac y has bee n att ained. Id. at 401–02. Courts should be war y of fi nd ingan “ a c tua l” a s opp os e d to “ imp lie d” c on sp ir a c y to conce al base d on “despe rate attempts to cover up a fter the crime be g ins to come to l i gh t .” Id. at 403. In this case, ho we ve r, the De fe nd ants ’ i mmi g ratio n f ra ud wa s n ot a desper ate attempt to cover up the ba nk fra ud; i t was pa

rt of the bank f

raud sc heme. De fendants’ elabor ate immigr ation fra ud sche m e included f

alse mar riag es involving a ll four Def endants who enter ed into the marria g es befor e the bulk of the bank fra

ud even occur

red. Those mar

riag es we re pa

rt of
an over all plan to steal the money and g et awa

y with it in t he Un i t ed S tates. Recognizi ng the diffe renc e betwe en “a cts of
conce alm en t d one in furthe ranc e of the main criminal objectives of the conspirac y , and ac ts of conce alment done afte r these c entra l objectives have been at t ai n ed, for the p urpose only

of cove ringup afte r the c rime,” id. a t 4 0 5 , we conclude that, to the extent that the immigration fraud wa s an act of conce alment, it was an integ ral pa rt of the c onspiracy ’s main criminal objec tive.

Fur thermore, the conspira cy continued until October 20 04

. Dur ingthe ir

fl ig ht f ro m Ch ine se a

uth or iti e s, De fe nd ants tr ave le d f

ro m Ca lif or nia to Wic hit a , K ans a s, in 2002 . Dur ingthe se tr ave ls w ith in t he Un ite d St a te s, Def endants c arr ied with them and used the false ide ntities and fra udulent immigration documents that were char g ed as pa rt of the c on sp ir a c y . G uo

jun and Yi ng yi w e re arr e ste d in Wic hit a on Se pte mb e r 2 2, 20 04 . D oc ume nts re late d to De fe nd ants ’ f

ra ud ule nt m arr ia g e s w e re fo un d in the ho us e wher e they

wer e li ving. Chaofan a

nd Wanfangwer e ar

rested in E dmo nd , Okl aho ma , on Oc tob e r 6, 200 4. A s e arc h o f t he ir residenc e resulted in the seizure of jewe lry and ca sh totaling $154,000, stashed in var ious locations throug hout the house.U NI TED S T A T ES V

. X U 46
Be cause Def

endants c o n t inued their hiding and flig ht throug h o ut the United States until October 2004—using fra udulently obtained immigration doc uments and carry ing bundles of ca sh—the conspira cy continued until that date. There fore , application of the amende d Guidelines as r efle cted in the 2007 edition was appr opriate.
Def endants a rgue that, even i f t he conspira cy did not end until Defenda

nts’ arr ests, the 2004 Guidelines sho u ld have been c onsulted to determine whe ther they would be more favor able to D efe ndants. Howeve r, the Guidelin es sections rele vant to Def

endants’ RI CO convictions (U.S.S.G. § 2S1.1
and § 2 B 1. 1) are ide nti c a l in the 2 00 4 a

nd 20 07 e dit ion s. Thus, Def

endants we re not pre

judiced by

appli cation of the 20 07 Gu ide lin e s o ve r t

he 20 04 Gu ide lin e s.
Def endants’ supple mental ar g ument th at application of pre- 2001 Gu i d elines to unindicted co- conspirator Yu Z hendongshould estop the g overnme nt from apply ing later G u i d e l i n e s t o D e f

e n d an t s i s d e v o i d

o f s u p p o rt i n g a

u th o r i ty. Moreove r, t he dis trict court c onsidered Yu Z hendong ’s lesser
se nte nc e a s a

mit ig a tin g fa c tor

fo r D e fe nd ants

. In sum, the district court did not violate the Ex Po st F ac to Clause by apply ing the 2007 Guidelines to a conspirac y

that did no t e nd un til De fe nd ants ’ 2 00 4 a rr e sts

. B. P roce dural E rror
Def endants a rgue that the district cour

t erre d in applying Gu ide lin e s § 2S1 .1 (a )( 1) ins te a d o f § 2S1 .1 (a )( 2) , r e su lti ngin a hig her ba s e off

ense le vel. We ag ree and re mand for
re s en t en ci n g.U NI TED S T A T ES V

. X U 47
“We r e v ie wth e d is tr ic t c o urt’ s inte r p r e tati o no f

the Guidelines de novo, the district co urt’s application of the Guidelines t o the facts of t he ca se for abuse of discretion, and the district court’s f

actua l findings f

or cle ar e rr o r.” United Sta te s v . Tr e ad

we ll , 593 F.3 d 990, 999 (9th Cir. 2010). Incorr ect c alculation of the Guidelines ra ng e constitutes proce dural e rror

. Un ite d S tates v . Ca rty , 520 F. 3 d 9 8 4, 993 (9th Cir. 2008) (e n banc)

. Th e dis tr ic t c ourt

de te rm ine d that § 2 S1. 1( a )( 1) a pp lie d to Def endants’ count one RI CO conspirac y conviction. Section 2S1.1(a)( 1) instructs that Def en d ants’ base offe nse leve l should be cal cu l at ed by using the offe nse leve l for the underlying offense (her e, the spe cified unla wful ac tivity

of “fr aud, or a

scheme to defra

ud, by or aga inst a foreig n bank”) when two c onditions are met. F irst , De fendants must have

“ c omm itt e d the un de rl ying of fe ns e ” or wo uld be a c c ounta

ble fo r t he un de rl yingof

fe ns e un de r a re le va

nt c on du c t ana ly sis

. U.S.S.G. § 2S.1.1(a )(1) (A). Second, the offe nse level for that underlying of

fense must be able to be determined. U.S .S.G. § 2S.1.1(a)( 1)(B ).

Her e, De fenda

nts were convicted of

conspirac y , an inchoate c ri m e whi ch does not re quire c ommissi on of the underlying of

fense

. See U

nited S t ates v. Thomas , 887 F.2d 13 41 , 1 34 5 ( 9th

Cir . 1 98 9) . D e fe nd ants did no t a dmi t guil t on the substantive cr imes enumerated in 18 U.S

. C

. § § 1957 & 23 14 , and

a s d isc us se d a

bo ve , th e g ov e rnme nt w a s una ble to establish the trac ing of funds necessar y to establish guilt on tho se un de rl yingof

fe ns e s. Th ere fo re , th e g ov e rnme nt m us t re ly on re le va nt c on du c t to me e t § 2 S.1 .1 (a )( 1) (A )’ s f ir st condition. For the following rea sons, we hold t hat applying the re levant conduc t analy sis to Defenda nts’ fore ign c onduct is not permissible.U NI TED S T A T ES V

. X U 48
W e h av e n o tad dre s s edt h e ap p l i cab i l i ty o f f o re i gn conduct to a ba se off

ense le vel ca lculation i n analog ous circ umstances, but ca se law f rom other c ircuits that have confr onted the issue make s us hes i t ant to apply the Def endants’ f

oreig n conduct to the ba se leve l calculation here . In Un ite d S

tates v . F ar ou il , 124 F.3d 838 ( 7th Cir. 1 9 9 7 ), th e S ev en thC i rc u i t a l l o we d co n s i d er at i o no f d ru gs found on an ove rsea s co-c onspirator in the de termination of a defenda nt’s base offense level. The drug s were discovere d in the co-c onspirator’s carr y -on lug g ag e as she was pre paring to board a fl i gh t to the United States. Id. at 840, 845. The court de termined that the dr ug s should be counte d ag ainst the defe ndant beca

use the drug crimes we re dire cted a g ainst the United States. Id. at 845.

Her e, De fenda

nts were Chinese nationals who c ommitt ed fra ud ag ainst the Ba

nk of China while on Chinese soil. The fr au d u l en t p ro ce ed s we re , o f co urs e, l at er l au n d er edth ro u gh Ever J oint and brought int o the Unit ed States. Howe ver, the Un ite d St ate s w a s o nly

ind ir e c tly

a ff e cted b y De fe nd ants ’ bank fr aud. Put another w ay , the connec tion between Def endants’ bank fra

ud and the United States is too
a tte nu a te d to be c on sid e re d w hen c a lc ulatin g a ba se of fe ns e le ve l. B y c on tr a st, De fe ndants’ imm ig ratio n f ra ud dir e c tly imp a c te d U nit e d St a te s’ int e re sts, and thu s it is p ro pe rl y c on sid e re d dome sti c c on du c t that do e s n ot i mpl ic a te the same re le va nt c on du c t c on c e rn s.
Simi larly , in United States v. Gre er , 285 F.3d 158 (2d Cir. 20 02 ), dr ug s intend e d f

or fo re ig n d istri butio n w e re a lso inc lud e d a s r e le va

nt c on du c t in

de te rm ini ngthe ba se of

fe ns e l ev el b ec au s e t h e u n d er l yi n g s t at u t e c ri m i n al i z edf o r e i gn condu c t ( i.e. , drugpossession abroa d) whe re the drug s were intended for

distribution i n the United States. 285 F .3d atU NI TED S T A T ES V

. X U 49
179–180 n.10. I n Gree r , howeve r, the d i s t ri ct court had no need to c onsider whether the def endant violated f

oreig n law to hold him r esponsible for his f oreig n acts bec au s e the statute at issue spec if

i ca lly cover ed the e x trater

riorial conduct. Id. at 179–80. But here, by instructing the jury

that De fe nd ants ’ f

ra ud a g a ins t th e B ank of China wa s a c ri me under Chinese law, the dist ri ct court plac ed the issue of d etermining for eig n law fr ont and ce nter. Such determ i n ations are highly problematic f

or sentenc ing purp os e s.
In United States v. Aze em , 946 F.2d 13 (2d Cir. 1991), the Se c on d Ci rc uit

wa rn e d that, “ To pe rm it f

or e ig n c ri me s to fi g ur e in fi xing the ba se of fe ns e le ve l w ou ld r e qu ir e c ourt s to perf orm a c are ful co m p arative ana ly sis of fore ign a nd do m es t ic law in such instanc es.” 946 F .2d at 17. The issue is more straig htforwa

rd her e bec ause, a s noted earlier, the Def endants’ a cts duringthe bank f rau d woul d have be en a c ri me un de r C hin e se or

Am e ri c an la

w. Ne ve rt

he le ss, it i s ea s y t o co n t em p l at e sc en ar i o s wh er e aco mp ar i s o no f f o re i gn and domestic lawis n o t so clea r cut. See id. at 18. (“ E x am p l es o f ac t i v i t i es th at v i o l at e o n e, b u tn o tb o th , fo re i gn an d d o m es t i c l aw s co u l d b e th e u s e a n d s al e o f c ert ai n

dru gs that would have violate d our law, but not t h e fo re i g n law wher e sol d and used, or a certa in use of alc ohol that violates the fore ign la

w where used but would not have done s o under do me sti c law. ” ). Th e re fo re , w e fo llo w the Se c on d Ci rc uit and “de cline to cr eate the complexiti es that the inclusion of fo re ig n c ri me s in

the ba se offens e le ve l c a lc ulatio n w ou ld g ener ate.” See A zeem , 94 6 F .2 d at 18 . B e c a us e De fe nd ants ’ fore ign c onduct ca

nnot be us ed to meet the re quirements of § 2 S1. 1( a )( 1) (A ), the dis tr ict c ourt pr oc e dura lly

e rr e d in applying that section to Defe ndants’ s en tence s and we ,U NI TED S T A T ES V

. X U 50

a c c or din g ly , r e mand fo r re se nte nc ing un de r § 2 S1. 1( a )( 2) in light of this conc lusion.

De fe nd ant C ha of

an a lso ob je c ts to va

ri ou s e nh a

nc e me nts resulting in an incre ase to his base level. Chaofa n’s objection to a tw o- le ve l e nh anc eme nt f or a bu se of a po sit ion of tr us t under § 3B 1.3 is meritless. See U.S.S.G. § 3B1.3 cm t . n.1 (providing“a bank ex ecutive’ s fra udulent loan sche me” a s an example of abuse of

trust). Chaofa

n’s objection t o a twolevel enha

nceme nt for re locati o n t o avoid law e nforc ement under § 2B1.1( b)(9) (A) is de void of analy sis a n dt here fore waived. See U

nited States v. Belgarde , 300 F.3d 1177, 1181 n.1 (9th Cir. 2002). However, Chaofan’s obje ction to a onelevel enha

nceme nt under § 2 S 1.1(b)( 2)(A) , for c onviction under 18 U .S.C. § 1 9 5 7 , has merit bec ause a finding of conviction under

§ 1957 for sentencingpurposes de pends on Chaofan’ s fore ign c onduct, which we ha ve held c annot be applied her e. The ref

ore, on r emand th e enhance ment under § 2S1.1(b)(2)( A) c annot be a pplied.
We need not re ach the i ssue of the substantive
rea s onablene ss of Def

endants’ se ntence s beca

use we have deter mined that the district court e rre d proce durally

. United States v. Rudd , 662 F.3d 1257, 1264 ( 9th Cir. 2011).
C. The $482 Million Restit ution O rder

De fe nd ants a lle g e that th e dis tr ic t c ourt did no t a de qu a te ly explain i ts conclusions in support of the $482 million restituti on awa

rd. Specific ally , Def

endants a rgue that the distri ct court never e x plicitly stated that re stitut ion was mandatory , never

explained how it determined that the B ank of China qualified a s a victim, and neve r justified the $482 milli on awa

rd. We ag ree and re mand for r econside ration.U NI TED S T A T ES V

. X U 51
“A r estitution orde r is r eviewe d for an abuse of discretion, provided that it is within the bound s o f the statutory framework. F actua l findings supportingan orde r of restitution are r eviewe d for c lear err o r. The le g ality

of an
o rd er of restitution is reviewed de novo.” U n ite d S ta te s v. Marks , 530 F.3d 799, 811 (9th Cir. 2008) (interna l quotation
m ark s o m i t t ed ). T h e d i s tri ctco urt ’s v al u at i o nm et h o d o l o gy is reviewe d de novo

. Un ite d S tates v . B us se ll , 504 F.3d 956, 964 n.9 (9th Cir. 2007).
Th e d i s t rict cour

t eng ag ed in a c ursory

analy sis of the leg al and f

actua l b asi s for the r estitution award be fore concludingthat the evidenc e at trial supported a finding “by clea r and c onvincing evidenc e that the loss t o t he B ank of Chi na re su lte d f

ro m the un de rl yingsc he me to d e fr a ud in excess of $480 million.” The $482 milli on restitution amount is f or th e most p art

c on sis te nt w iththe state me nt o f o ff e ns e c on du c t in

the Pr e se nte nc e Re po rt . How e ve r, De fe nd ants contested those f

acts, a nd the district co u rt reje cted the prese ntence repor

t’s fac tual finding s to the ex t en t t hey wer e inconsistent with the district court’s fi n d i n g s. Although w e may up ho ld a re sti tut ion or de r wh e n the dis tr ic t c ourt fa ils to make pe rtinent fac tual finding s, the basis of the c ourt’s calc ulations must b e clear for us to do so. United States v. Y eung , 672 F.3d 594, 604 (9th Cir. 2012). The basis for the district court’s c alculations ar e not clea r her e. “Restitution can only

be base d on actua l loss.” United Sta te s v Sto dd ar d , 150 F.3d 1140, 1147 ( 9th Cir. 1998) (interna l citations omitted). A restitut ion order must also be “base d on losses directl y resulting from a de fenda nt’s offe nse.” Bu sse ll , 504 F.3d at 964 (interna l quotation marks omitted). We ha

ve previously noted the difficulties inher ent in relying on loss determinations for pur poses of Guide linesU NI TED S T A T ES V

. X U 52
calc ulations during the calc ulation of restitut ion amounts, see Un ite d S tates v . G os si , 608 F.3d 574, 581–82 ( 9th Cir. 2010), and have held t hat s uch reliance is improper, Y eung , 672 F.3d at 604. The tra

nscript of the se ntencinghear ing r evea ls that the dis tr ic t c ourt

re fe rr e d to its Gu ide lin e s c a lc ulatio ns in
makin g fa c tua l f

ind ing s r e g ard ingthe amou nt o f a c tua l lo ss su ff e re d by the B ank of Chi na

. Th is re fe re nc e is esp eci a lly inappropriate g iven the pre viously discussed i nability to trace De fe nd ants ’ f

ra ud ule nt a c tiv ity

to a c tua l ba

nk los se s. There fore , beca

use the district court did not pr ovide suffic ient g rounds to support the $482 mi l l i o n fi g ure, w e re mand for
rec onsideration re g ardingthe leg al and f ac t u al basis for the restitution order. S

e e U n ite d S ta te s v

. W a k nine , 543 F.3d 546, 557–58 (9th Cir. 2008).

IX. Conclusion

We a ff ir m D e fe nd ants ’ co nv ic tio ns but va c a te the ir sentenc es and r emand f

or re sentenc ing. De fenda nts’ count one convic tions are no t the re sult of an improper
e xtrate rr ito ri a l a

pp lic a tio n o f t

he RI CO c on sp ir a c y

statut e beca use De fenda

nts’ criminal ente rprise involved both ba nk fra ud and immigr ation fra

ud cente red on stealingmoney from the B ank of China and trave ling fre ely with that stolen money in the United S tates. The evidence was suff icient to support convictions on count t wo, money launder ing c onspiracy , and
c o un tth r e e , c o n s p i r a c y t o tr an s p o rts t o l e nm o n e y.
We remand f

or re sentenc ing be cause the district court improperly

relied on D efe ndants’ foreig n conduct to meet the require ments of § 2S 1

. 1(a) (1)( A) re sulting in proce duralU NI TED S T A T ES V

. X U 53

err or, improper ly

applied a one-le vel enhanc ement base d on fore ign c onduct, and f

ailed to provide a

n adequate leg al and fac tual basis for the $482 million restitution order.

AF F IRMED, IN P ART, VACA TED, IN PA RT, AND REMAND ED.